The US dollar opens under pressure as several central banks gather this week to discuss monetary policy. The European Central Bank is widely expected to raise interest rates, while the Bank of England, the Reserve Bank of Australia and the Bank of Japan will leave interest rates unchanged. As a result of this expectation, the euro has found support going into this week’s meeting, despite the relatively strong data seen at the end of last week in the US and hawkish comments coming out of Fed officials.

Sterling

Sterling has held onto levels against a falling dollar, but there could be more downside in front of this week’s central bank meeting against the euro.

US dollar

The US dollar opens back down against most major currency crosses. The dollar is touching fresh five-month lows against the euro, is close to one-week lows against sterling and seven-month lows against the yen. The dollar’s decline comes despite more hawkish comments made by Federal Reserve policymakers and despite more upbeat economic data showing an improvement in the employment market..

Euro

The euro continues to see support going into this week’s ECB policy announcement. Markets widely expect the central bank to raise interest rates. The outlook is supporting the euro. On the political front, Ireland continues to try to renegotiate terms for its bailout loan and Portugal announced that elections will be held on June 5.

Japanese yen

The Japanese yen continues to lose ground against most major currencies. The yen is at seven-month lows against the dollar, 11-month lows against the euro and eight-month lows against sterling. The central bank will meet this week and is expected to revise down its economic assessment of the Japanese economy. The Bank of Japan will also maintain its easy monetary conditions in order to help support stability within its financial markets as the damage done by the March 11 events continued to unfold.

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