Investing.com - The dollar edged higher against a basket of the other major currencies on Monday, but gains were held in check as investors looked ahead to speeches from Federal Reserve and other senior central bank officials later in the week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up 0.13% to 97.11 by 10.19 GMT (06.19 ET), pulling back from Friday’s one-week lows of 96.84.
The dollar remained on the defensive after recent lackluster economic reports raised questions over the Fed’s plans to tighten monetary policy.
The Fed raised interest rates for the second time this year earlier in June and stuck to its projection for one more rate hike this year despite the subdued inflation outlook, but investors think the pace of its tightening will be much slower than policymakers want.
Futures traders are pricing in less than a 15% chance of a hike at the Fed's September meeting, according to Investing.com’s Fed Rate Monitor Tool. Odds of a December increase was seen at about 35%.
Investors were looking ahead to a speech by Fed Chair Janet Yellen on Tuesday for fresh indications on the path of interest rates and the Fed’s plans to trim its balance sheet.
Meanwhile, European Central Bank Mario Draghi was to speak later Monday and his remarks would be watched for signs that the bank is moving towards a reduction of its stimulus program.
The dollar moved higher against the yen, with USD/JPY rising 0.3% to 111.61.
The euro was a touch lower, with EUR/USD at 1.1184, not far from Friday’s four day high of 1.1208.
In the euro zone, data on Monday showed that German business confidence hit a record high in June, bolstering the outlook for the bloc’s largest economy.
Sterling was slightly higher against the greenback, with GBP/USD at 1.2737 amid growing expectation for a rate hike by the Bank of England in the coming months.