The US dollar fell against most of the world's currencies on Monday, as the yen and yuan policies of the central banks of Japan and China put pressure on the US currency.
The US Dollar Index (DXY), which tracks the greenback against a basket of global currencies, fell 0.09% to 104.33.
The USD/CNY pair fell 0.24% to 7.2117, although the yuan was under pressure from growing market expectations of further monetary easing by the People's Bank of China to support the world's second-largest economy.
According to Reuters, China's state-owned banks sold dollars for yuan in domestic markets on March 25th, helping to strengthen the local currency after it plunged late last week.
The USD/JPY was down 0.06 percent at 151.32. The yen was supported by comments from some of Japan's top officials.
Masato Kanda, Vice Minister of Finance for International Affairs, called the yen's recent moves "speculative" and added that the Bank of Japan is ready to respond to the currency's movements. The statement reinforced an earlier announcement by Bank of Japan Governor Kazuo Ueda, who indicated that the central bank would move slowly but steadily toward normalizing monetary policy.
"The verbal intervention by Japanese officials is creating very strong near-term resistance for the dollar/yen pair ... I think this is keeping the dollar/yen from rising significantly," stressed Carol Kong of the Commonwealth Bank of Australia.
"Support for the yuan helped limit the dollar's advance on Friday, as did the rather aggressive verbal intervention in support of the yen by Japanese officials," said Chris Turner at ING.
EUR/USD rose 0.15% to 1.0821 as traders believe the Federal Reserve is in no hurry to cut interest rates, unlike some European central banks.
On March 21, the Swiss National Bank cut its key interest rate by 25 basis points, becoming the first global bank to embark on a policy of rate cuts.
GBP/USD rose 0.14% to 1.2619. In addition, AUD/USD and NZD/JPY rose by 0.25% and 0.23% to 0.6530 and 0.6006, respectively.
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