Dollar on firmer ground after recent losses

The dollar inched higher on Monday, stabilizing after recent losses ahead of a week containing a closely-watched Bank of Japan meeting and the last few data releases before Federal Reserve and European Central Bank rate decisions in early May, Reuters reported.

Moves were fairly muted with the pound down 0.2% to $1.2420 and the euro down 0.1% at $1.09775, neither currency having been able to hold respective multi-month highs above $1.25 and $1.10 reached in mid April.

The dollar edged up 0.1% against the Japanese currency to 134.2 yen per dollar, with the dollar index up 0.12% at 101.8.

The index, which measures the dollar against a basket of other major currencies, hit a one year low of 100.78 on April 14, as markets priced in rate cuts by the Federal Reserve later this year while betting on a few more rate increases in Europe.

Both the Fed and the ECB will meet in early May but before that markets will digest U.S. first quarter GDP and personal consumption expenditures (PCE) data, looking for signs of economic strain and evidence of sticky inflation for clues on the Fed’s policy path.

Policymakers are widely expected to raise rates by another 25 basis points at next week’s Federal Open Market Committee (FOMC) meeting, though the focus will be on guidance for future moves.

Data released on Friday showed that U.S. and euro zone business activity gathered pace in April, reducing concerns about an impending recession in major economies.