Investing.com - The dollar was trading near 16-month highs against a currency basket on Monday, bolstered by expectations that the Federal Reserve will hike interest rates again in December and beyond.
The U.S. dollar index that tracks the greenback against a basket of other currencies was up 0.1% to 96.87 by 10:36 PM ET (3:36 GMT). The index has strengthened four weeks in a row, gaining 0.4% last week.
The Fed indicated last week that it is still on course to hike interest rates in December and in early 2019, with the U.S. economy looking strong on almost all fronts.
"The dollar index was firm all last week, bouncing back after the mid-term election results. Looking ahead, moves will be driven by the developments around the Italian budget and Brexit politics," said Sim Moh Siong, currency strategist at Bank of Singapore.
The EUR/USD pair and the GBP/USD pair slipped 0.1% and 0.3% respectively.
Brexit negotiations remained in focus amid reports that the UK and European Union are edging closer to a draft deal.
"Eventually, the EU and May will come to a deal. Both parties want to conclude the deal, but the only risk is whether May will still be Prime Minister. I expect sterling to remain choppy in its recent wide range," added Sim Moh Siong.
USD/CNY inched up 0.1% to 6.9632 as the People's Bank of China (PBOC) set the yuan reference rate at 6.9476 vs Friday's fix of 6.9560.
Elsewhere, USD/JPY was up 0.2% to 114.0, while AUD/USD and NZD/USD were little changed at 0.7228 and 0.6745 respectively.