The dollar firmed on Monday, recovering from recent losses in the wake of some weak U.S. economic data, but gains are expected to be contained ahead of the Federal Reserve’s key monetary policy meeting this week.
The Fed will announce a decision on monetary policy on Wednesday which will help set the tone for the dollar in the near to medium term.
The dollar’s searing rally since the summer of last year had slowed following a run of poor U.S. economic numbers, including a softer-than-expected non-farm payrolls report for March. That has cemented expectations for a more gradual pace of interest rate increases by the Fed.
Last week, weak figures for new home sales, weekly jobless claims and business spending undermined the dollar.