Dollar drops on profit-taking

AFP FILE PHOTO

NEW YORK – The dollar Monday fell against most major currencies as investors took profits following last week’s announcement that the US Federal Reserve will soon scale back monetary stimulus.

Near 2200 GMT, the euro advanced to $1.3695 from $1.3671 Friday.

The euro also gained on the yen, trading at 142.58 yen from 142.31.

The dollar gained on the yen, increasing to 104.11 yen from 104.06.

The greenback last week notched impressive gains on Wednesday and Thursday immediately following the Fed’s announcement that it will trim $10 billion in monthly asset purchases starting in January.

Analysts said the Fed’s money-tightening move contrasts with those of other central banks, including the European Central Bank and the Bank of Japan, which could take further measures to loosen monetary policy in the months ahead.

But the dollar began losing momentum on Friday and that trend continued Monday.

Last week’s big bets on the dollar “triggered hangovers today, leading to profit-taking on the US dollar against nearly every one of its G20 counterparts,” said Ravi Bharadwaj, senior pricing and market analyst at Western Union Business Solutions.

The Commerce Department Monday released data showing strong US consumer spending in November. But the report “failed to make a dent on the buck’s slide,” Bharadwaj said.

The pound rose to $1.6352 from $1.6332 Friday.

The dollar dipped to 0.8939 Swiss franc from 0.8958.