MW: Dollar sticks to tight ranges, but drifts lower against British pound
The U.S. dollar stuck to mostly tight ranges in holiday-thinned trading on Monday, but moved lower against the British pound as investors focused on a Brexit debate in the country‚Äôs House of Lords.
The ICE U.S. Dollar Index DXY, +0.17% , which gauges the buck against a basket of six rivals, rose 0.1% to 100.85. The WSJ Dollar Index BUXX, +0.02% , a measure of the U.S. dollar against 16 major currencies, was up 0.02% at 90.99.
The pound GBPUSD, +0.4109% rose to $1.2466 from $1.2421 late Friday. The Lords debate over whether the Brexit bill, which would permit the U.K. government to trigger talks on the U.K.‚Äôs exit from the European Union, follows the House of Commons vote in favor of the legislation. It may be an issue for traders to consider Monday, even if not much comes of the discussion.
‚ÄúThe House of Lords is expected to approve [the bill] as well, with the possibility of any amendments appearing rather low once again,‚ÄĚ said Marios Hadjikyriacos, analyst at IronFX, in a note to clients
‚ÄúEven if the Lords manage to introduce any changes, those would have to be ratified by the Commons, who have already showed their intentions of not wanting to interfere with or delay the government‚Äôs plans,‚ÄĚ he said.
Elsewhere, already facing downside pressure from eurozone political instability, the euro EURUSD, +0.0094% was at $1.0609, compared with $1.0605 late Friday. The single-bloc currency to ¬•119.65 on Friday its lowest level since Feb. 9.
The euro came under pressure on concerns that far-right presidential candidate Marine Le Pen could be headed for victory, which if backed up by other election results, could lead to France exiting the EU. News reports last week suggested that two leaders from the political left could join forces, possibly hurting the chances of the centrist candidate Emmanuel Macron and helping Le Pen.
‚ÄúBecause of lessons we learned from [U.K. voting and U.S. election] results last year, this issue will likely keep smoldering,‚ÄĚ said Kyosuke Suzuki, head of FX and money market sales department at Societe Generale in Tokyo. ‚ÄúBut I don‚Äôt think investors take this [French election] issue seriously for now.‚ÄĚ
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While eurozone political concerns are one issue for investors right now, some analysts said focus remains on tax and stimulus plans expected to come from U.S. President Donald Trump.
But a lack of fresh trading cues gave no clear direction to the U.S. currency. The U.S. Presidents Day holiday is likely to keep trading muted for Monday.
The dollar gained only moderately against the yen as Japanese corporate players bought the greenback for the purpose of commercial trade settlement in the mid-morning session.
The greenback USDJPY, +0.30% was changing hands at 113.16 yen, compared with ¬•113 late Friday in New York.