TOKYO: Nov 30 The dollar edged up to a fresh 8-1/2-month high against a basket of global currencies on Monday, while the prospect of further stimulus this week by the European Central Bank kept the euro on the defensive.
The dollar index added about 0.1 percent to 100.12 after earlier rising as high as 100.23, closing in on a 12-year high of 100.39 set in March.
It was up more than 3 percent for the month, and nearly 11 percent for the year.
“The euro has a high weighting in the dollar index, so when the euro falls, the index tends to rise,” said Ayako Sera, a senior market economist with Sumitomo Mitsui Trust in Tokyo.
The euro inched down about 0.1 percent to $1.0583, moving back toward last week’s low of $1.0565 – a level not seen since April. It was down nearly 4 percent for the month and more than 12 percent in 2015 so far.
Against the yen, the euro was down about 0.2 percent at 129.90, not far from a seven-month trough of 129.67 set on Friday.
Soft inflation readings out of the euro zone on Monday and Tuesday could strengthen expectations for ECB action at its Dec. 3 policy review, but whatever the outcome, an easing appeared to be fully factored in.
“The ECB is likely to announce more monetary stimulus at their policy meeting on Thursday, which should see EUR/USD end the week lower and generate a drag on AUD/USD,” said Richard Grace, chief currency and rates strategist at Commonwealth Bank.
