Investing.com -The dollar fell to fresh five-week lows against a basket of the other major currencies on Monday as expectations of a slower pace of U.S. interest rates hikes than some investors had anticipated continued to weigh.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% at 99.94, the lowest level since February 6.
The Fed raised its benchmark interest rate last week in a widely-expected move, but stuck to its projection for two more hikes this year. Heading into the meeting, markets had braced for a potentially more hawkish tone from the Fed
Investors remained cautious ahead of a week in which no less than nine Fed officials were to speak, including Fed Chair Janet Yellen on Thursday.
The dollar was steady near two-week lows against the yen, with USD/JPY at 112.74.
Trade volumes remained thin overnight, with markets in Japan closed for a holiday.
The euro pushed higher, with EUR/USD rising 0.27% to 1.0766, not far from Friday’s six-week high of 1.0781.
Investors continued to monitor political developments ahead of the upcoming French presidential elections after a poll showed far-right anti-EU leader Marine Le Pen widening her lead over opponent Emmanuel Macron in the first round of France's presidential elections due on April 23.
The poll also showed Macron beating her comfortably in the second-round run-off on May 7.
Meanwhile, sterling hit three-week highs, with GBP/USD advancing 0.19% to 1.2419.
The pound was boosted by recent hawkish remarks from the Bank of England and the prospects that Tuesday’s inflation report would show UK inflation rising above the BoE’s 2% target.
British Prime Minister Theresa May was beginning a nationwide tour on Monday to "unite the country” before the formal launch of the UK’s divorce proceedings from the European Union.