The Canadian dollar weakened to its lowest level since early August, trading above 1.40 against the U.S. dollar, as falling crude oil prices and a widening monetary policy gap with the Federal Reserve pressured the currency.
Cuba is grappling with a severe cash shortage and hyperinflation as its peso plummets to a record low, prompting the communist government to introduce market-oriented reforms, including authorizing the first private currency exchange.
ING maintains its 1.160 year-end forecast for EUR/USD, even after predicting an additional ECB rate hike, citing market pricing of similar monetary policy paths for both the Federal Reserve and the European Central Bank.
Analysts at Goldman Sachs believe a potential move by Hungary's central bank to lower its inflation target to 2.5% would be a positive development for the Hungarian forint, signaling a stronger commitment to price stability.
Euro zone government bond yields fell on Monday, led by German debt, as lower crude oil prices and political uncertainty in Germany prompted a flight to safety while investors awaited remarks from top ECB officials.
Analysts at Deutsche Bank expect the US dollar to extend its gradual decline through the end of the year, though they see the euro remaining range-bound against the greenback. The bank is also becoming more selective on carry trades and has added some long dollar positions against emerging market currencies.
According to UBS, the Bank of Japan's recent 25-basis-point rate increase is unlikely to trigger a sustained appreciation for the yen, with the firm forecasting sideways trading for the USD/JPY pair.
The British pound fell against a strengthening U.S. dollar on Monday, as elevated energy prices and market expectations for another Federal Reserve interest rate hike this year provided support for the greenback.
Most Asian currencies traded in a narrow range on Monday amid holiday-thinned volumes, as investors awaited a high-stakes summit between U.S. and Chinese leaders. The U.S. dollar saw modest gains, supported by the Federal Reserve's recent hawkish stance.
