Dollar Down on Positive Economic Outlook

The dollar weakened Monday amid expectations that US interest rates will remain low for a while as hopes for a global economic recovery on COVID-19 vaccine rollouts loom.

Investors are currently set to pay attention to the minutes of the US Federal Reserve December meeting Wednesday, which is likely to offer more detail on making the central bank’s forward policy guidance more explicit, as well as the potential for a further increase in asset buying this year.

Some other major events on the agenda include the release of a number manufacturing surveys across the globe later today, as well as Tuesday's Senate run-offs in Georgia, which will determine which party controls the Senate. A victory for either of the Republicans would mean their party keeps a narrow majority in the Senate. If the Democrat candidates win, however, the dollar could be further weakened by expected higher stimulus spending and improved market sentiment.

So far, by 07.55 GMT, the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.3% to 89.597. 

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