Investing.com - The dollar was holding steady against a basket of the other major currencies on Monday but struggled to make headway as investors continued to assess the outlook for rate hikes after dovish remarks from Federal Reserve officials.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 100.37.
The index plumbed 98.92 last week, its weakest since November 10 in the wake of President Donald Trump’s failed healthcare overhaul bill.
The dollar index ended the first quarter down almost 3% amid growing doubts over whether the Trump administration's economic proposals would boost the U.S. economy and allow the Fed to tighten policy more aggressively.
Higher rates typically support the dollar by making U.S. assets more attractive to yield-seeking investors.
On Friday, New York Fed President William Dudley said the central bank was in no rush to tighten monetary policy this year.
Separately, St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari also said on Friday they expect rate increases by the years end, but both were cautious on the economic outlook.
Data on Friday showing that U.S. consumer spending ticked up just 0.1% last month reinforced the view that the Fed will stick to a gradual pace of rate hikes.
The dollar was almost unchanged against the yen, with USD/JPY at 111.44, holding below Friday’s two-week highs of 112.19.
The Bank of Japan's closely watched "tankan" survey showed Monday that business sentiment among large Japanese manufacturers rose to a one-and-a-half year high in March, signaling that the economic recovery is broadening.
The euro was a touch higher, with EUR/USD ticking up to 1.0663, still not far from Friday’s more than two-week lows of 1.0650.
The euro remained on the back foot as investors unwound expectations that the European Central Bank is moving closer to tightening monetary policy.
Sterling edged lower, with GBP/USD down 0.15% to 1.2528 ahead of UK manufacturing data which was expected to show that factory activity remained solid in March as the weaker pound offset uncertainty over Brexit.