Investing.com - The dollar remained near a 16-month high on Monday, as concerns over Brexit and political issues in Italy weighed on the pound and euro.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, surged 0.47% to 97.19 as of 10:36 AM ET (15:36 GMT), not far from a session high of 97.36, the most since June 2017.
The greenback surged amid expectations that the Federal Reserve will raise rates in December and beyond. An equity selloff also helped boost demand for the dollar, as Wall Street opened lower.
Still, trading is expected to be slower, with the U.S. bond market closed because of the Veterans Day holiday.
The dollar rose slightly against the Japanese yen, with USD/JPY inching up 0.02% 113.83. The Canadian dollar was higher, with USD/CAD falling 0.10% to 1.3199.
Sterling was pushed lower after reports that Prime Minister Theresa May had cancelled a cabinet meeting to approve a Brexit deal. The move makes it unlikely that a meeting with the European Union will happen by the end of the month to discuss the UK leaving in March. GBP/USD fell 0.59% to 1.2894 as traders fear a no-deal Brexit is immediat.
Meanwhile the euro was under pressure amid an ongoing row between Brussels and Rome. The European Commision reject Italy’s 2019 budget, citing it was in breach of European fiscal rules. Italy’s government has until Tuesday to submit a revised fiscal rule.EUR/USD fell 0.63% to 1.1265.
Elsewhere, the NZD/USD was flat at 0.6742, while AUD/USD lost 0.25% to 0.7206.