MW: Dollar drops against euro and other currencies
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) — The U.S. dollar fell against other major currencies on Monday, weighed by the view that the Federal Reserve is in no rush to scale back its bond-buying program.
The ICE dollar index DXY -0.27% , a measure of the U.S. unit against six other currencies, declined to 80.676 on Monday morning from 80.824 on Friday afternoon.
Last week, the index fell 0.6% after Janet Yellen vigorously defended the Fed’s bond buying, saying the benefits of the program outweigh the costs. Yellen is nominated to take over leadership of the central bank from Chairman Ben Bernanke at the beginning of the new year.
The Fed currently buys $85 billion in Treasury and mortgage debt each month in an effort to stimulate the economy, and those purchases have been understood to weigh on the dollar.
“The investment climate is characterized by the continued accommodative monetary stance by the three key central banks: the Federal Reserve, the European Central Bank and the Bank of Japan,” wrote analysts at Brown Brothers Harriman in a note to clients.
This week’s economic data are unlikely “to alter the widespread understanding that the ECB and BOJ may take more measures later and that the Federal Reserve is likely maintain the current course until at least the end of [the first quarter in 2014],” they said.
Several Fed officials will speak on Monday, including New York Fed President William Dudley.
The WSJ Dollar Index XX:BUXX -0.29% , a rival gauge that pits the greenback against a broader basket of currencies, fell to 73.11 on Monday from 73.26 on Friday.
The euro EURUSD +0.32% rose to $1.3515 from Friday’s $1.3493, while the dollar USDJPY -0.38% fell to 100.04 Japanese yen from ¥100.19 on Friday.
The British pound GBPUSD +0.01% was little changed at $1.6109.
In other news, the virtual currency Bitcoin soared to record highs on Monday.
Polya Lesova is MarketWatch's New York deputy bureau chief. Follow her on Twitter @PolyaLesova.
