Investing.com - The dollar moved lower against a basket of other major currencies on Monday as the euro gained ground ahead of euro zone inflation data later in the week , and the pound surged to multi-year highs.
EUR/USD touched highs of 1.3876, the most since April 11 and was last up 0.22% to 1.3864.
The euro was supported by hopes that Wednesday’s report on euro zone inflation would show that consumer prices ticked higher this month, easing pressure on the European Central Bank to implement additional monetary policy measures.
The single currency received an additional boost after ECB Governing Council member Christian Noyer said Monday that while the strong euro was weighing on consumer prices the euro area was not at risk of falling into deflation.
Meanwhile, sterling rose to fresh four-and-a-half year peaks of 1.6853 against the dollar, and GBP/USD was last up 0.22% to 1.6836.
Demand for the pound continued to be underpinned by expectations that the Bank of England could raise interest rates in the early part of next year.
Market participants were looking ahead to preliminary data on U.K. first quarter growth due for release on Tuesday, amid expectations that growth accelerated in the first three months of this year.
Sterling was also boosted by expectations for merger and acquisition inflows after U.S. drugs giant Pfizer Inc (NYSE:PFE) confirmed Monday that wanted to take over Britain''s Astrazeneca Plc (AZN.LONDON) in a deal worth almost £60 billion.
Elsewhere, USD/JPY was up 0.16% to 102.34, ahead of monetary policy statements by the Bank of Japan and the Federal Reserve later in the week. The BoJ was expected to keep the size of its stimulus program unchanged, while the Fed was expected to stick to its current timetable for tapering its asset purchase program.
Meanwhile, Friday’s U.S. nonfarm payrolls report for April was expected to indicate that the recovery in the labor market is continuing.
USD/CHF was down 0.42% to trade at 0.0.8778.
The Australian dollar was higher, with AUD/USD rising 0.22% to 0.9289, while NZD/USD slipped 0.23% to 0.8559. The Canadian dollar was slightly higher, with USD/CAD losing 0.17% to trade at 1.1019.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was at 79.65, down 0.23%.
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