By Gina Lee
Investing.com – The dollar fell in Asia on Monday morning, but the focus was on the pound and yen.
The pound recovered from its previous session’s losses as fears of a hard Brexit intensified. In Japan, the ruling party will vote for a new leader later in the day, with the winner widely expected to replace incumbent Prime Minister Shinzo Abe.
The one that tracks the dollar against a basket of other currencies was down slightly by 0.16 percent to 93.192 by 11:57 p.m. ET (4:57 a.m. GMT) and rolled over to the December contract on Sunday.
Investors await the U.S. Federal Reserve’s policy meeting scheduled for Wednesday, which is widely expected to further ease monetary policy. But some investors cautioned against setting those expectations too high.
“Having set aside yield curve control as a short-term policy option, the FOMC does not appear to have reached an operational consensus on how to use the balance sheet,” Standard Chartered (OTC:) strategists said in a note.
“This may disappoint investors,” they added.
Other central banks, including the Bank of Japan and the Bank of England, will announce policy decisions on Thursday.
The pair rose by 0.22% to 1.2821, although heightened fears that the UK will leave the European Union (EU) without a trade deal weighed on the pound.
London admitted the week before that it might violate international law “in a very specific and limited way”. Those comments led to a backlash from European Commission President Ursula von der Leyen as well as former Prime Ministers Tony Blair and John Blair. Tony Blair and John Major said on Sunday that Britain must abandon “shocking” plans to legislate to undermine its divorce treaty with the European Union in violation of international law.
The pair fell slightly by 0.04% to 106.09 ahead of the ruling Liberal Democratic Party’s vote for a new leader later in the day.Chief Cabinet Secretary Yoshihide Suga is expected to win in a landslide and Abe’s successor is expected to be appointed on Wednesday.
Investors expect few radical changes and generally expect Suga, if appointed, to continue Abe’s current policies.
“The focus is on his cabinet line-up and whether he will hold snap elections,” Minori Uchida, chief foreign exchange strategist at MUFG Bank, told Reuters.
But he added: “He is saying he will continue and advance Abenomics, but how much he can advance is a question.”
The pair fell slightly by 0.03 percent to 0.7281, while it rose 0.46 percent to 0.6694.
The pair fell slightly by 0.04% to 6.8301.China is scheduled to release industrial production and retail sales data on Tuesday.
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