Dollar extends its gains ahead of Fed meeting NEW YORK —The dollar extended its gains Monday on the back of a fall in unemployment figures at the end of last week, as investors were cautious ahead of a two-day meeting of the Federal Reserve on interest rates. The dollar reversed what has been its recent trading pattern on Friday, surging higher alongside equities after a government report showed U.S. unemployment falling for the first time in 15 months. The dollar, a traditional safe-harbor currency, has often taken a hit recently as signs of recovery emerge from economic data around the world. Good news often helps equities, emerging-market currencies and other riskier investments. The 16-nation euro fell to $1.4132 in late trading from $1.4172 late Friday, while the British pound slid to $1.6464 from $1.6668. The dollar slipped to 97.07 Japanese yen from 97.63 yen. It is widely expected the Fed will keep key interest rates steady at near zero at its meeting that begins Tuesday. Raising the interest rate from its current range near zero would boost the dollar, as it would make returns on investments more lucrative and attract funds from investors. Markets will be looking for direction from the Fed’s economic statement. Analysts are still concerned about how and when policymakers will withdraw the enormous support the Fed erected in the fall to prop up the financial system. The economy must first be stable enough to withstand an increase in interest rates that would boost borrowing costs, including mortgage rates. In other late trading Monday, the dollar rose to 1.0859 Swiss francs from 1.0830 francs late Friday, and edged up to 1.0899 Canadian dollars from 1.0827.

Source