The euro further strengthened against the dollar supported by growing expectations that the Federal Reserve would shift to a more accommodative policy and concerns about slower U.S. economic growth.
The British pound kept gains against the dollar helped by solid macroeconomic data and by a successful vote in the UK parliament for the government to seek an extension to Brexit’s current date of March 29th. This Thursday Prime Minister May will discuss an extension proposal with EU leaders.
Following last week’s Bank of Japan decision to leave rates unchanged and somewhat dovish position from Governor Kuroda, the Japanese yen remained flat against a softer dollar.
The U.S. dollar index fell sharply against its major peers last week as investors look ahead to Wednesday’s Fed interest rate decision. The dollar has been weaker as traders speculate that if there is any movement in interest rates this year, it is more likely to be down than up.
U.S. indexes rose last week supported by the financial and technology sector. Boeing acted as a drag on the Dow, as the company’s top selling new model, the 737 Max, involved in two plane crashes over the past five months, was grounded.
Gold prices ended higher last week on expectations that the Federal Reserve will send a more dovish tone about monetary policy by the end of this year.
Oil prices continued to climb and this week hit a fresh four month high. OPEC promised over the weekend to increase compliance with the deal to cut oil output by 1.2 million barrels per day. Saudi oil minister Khalid al-Falih told reporters on Monday that the market is still oversupplied and expectations are rising that the deal might be extended by the end of this year.