LONDON (SHARECAST) - The dollar firmed against major currencies on Monday but still remained at near seven-month lows after last week's bond buying announcement by the Federal Reserve.
The outlook for the dollar has been hurt by the Fed's announcement that it would pump $40bn into the economy every month until the unemployment market improves.
The ICE dollar index, which measures the greenback against a basket of six major currencies, advanced to 79.044 from 78.865 on Friday. It had traded at an intra-day low of 78.719 on Monday.
The euro bought $1.3093 from $1.3121 the previous session after trading at a low of $1.3082 as profit takers moved in.
Against the yen, the dollar advanced to ¥78.75 from ¥78.39 on Friday although trading was quieter than usual with Japanese stock markets closed for a holiday.
The euro hit a high of ¥103.85 before later trading at around ¥103.07 against the broadly weaker yen.
Investors noted that worsening tensions between China and Japan over islands in the East China Sea curbed appetite for the Japanese currency. The yen was also hurt by the downgrade of Japan's economic outlook and the prospect of more monetary policy easing. The Bank of Japan concludes a two-day meeting on Wednesday.
Elsewhere sterling struck a fresh 4 1/2 month high against the dollar on Monday while the Australian dollar bought $1.0458 from $1.0553 on Friday.
LONDON (SHARECAST) - The dollar firmed against major currencies on Monday but still remained at near seven-month lows after last week's bond buying announcement by the Federal Reserve.
