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The dollar dropped against other major currencies yesterday, as a pause in US bombing in Iran dragged oil prices lower and lifted risk appetite ahead of a busy week of central bank meetings.
Against the yen, the US dollar was down 0.1 per cent at 163.645 yen, on course for its sharpest daily decline since July 10.
The euro was up 0.2pc at $1.130, while the pound pared early gains and eased about 0.1pc to $1.331.
The dollar index, which measures the US currency’s strength against a basket of six others, dipped 0.1pc to 101.34 ahead of the Federal Reserve’s policy meeting.
Traders see a roughly 33pc chance of a quarter-point Fed rate hike tomorrow, down from 37pc at the end of last week but double the probability seen a week ago, according to CME Group’s FedWatch tool.
Bullish bets on the dollar against other major currencies climbed to their highest level since 2015, with speculators’ net long positions surging to $45.37 billion in the week ended July 20, Commodity Futures Trading Commission data showed.
With the yen pinned near last week’s 40-year lows against the dollar, the Bank of Japan is expected to leave the door open to further hikes to arrest the currency’s decline
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