The Dollar Rises in an Important Week For The Markets

The dollar maintained its gains today, after recording the largest weekly gain in six weeks, as traders cut bets on the currency’s decline ahead of the upcoming Federal Reserve meeting, which may indicate future changes in US monetary policy.

The US central bank begins a two-day policy committee meeting tomorrow, Tuesday. Recent data indicating rising inflation has raised concern that price pressures following the resumption of economic activity after the pandemic may force policymakers to scale back stimulus plans early.

Against a basket of currencies, the US currency settled at 90.5 in early trading in London, after rising as much as 0.4% last week, the largest weekly increase since early May.

The sterling was the biggest loser among the currencies of developed countries, amid news that Britain will delay the end of social distancing measures, while the government tries to slow the rapid increase in Covid-19 infections.

Against the dollar, the euro and sterling fell as much as 0.2% in early trade.