The U.S. dollar rose against the euro on Monday on expectations that the Federal Reserve will take a less-dovish stance on monetary policy at the end of a two-day meeting on Wednesday, while risk aversion on lower oil prices underpinned the yen.
Bets that the Fed would take a less-accommodative stance on monetary policy and remove the phrase ``considerable time'' in reference to its timeline for raising rates supported the dollar. Analysts said the Fed could do so on signs of improvement in the U.S. economy, including the labor market.
Higher interest rates are expected to boost the dollar by driving investment flows into the United States.
The dollar's gains against a basket of major currencies, including the euro and Swiss franc, did not carry over to the Japanese yen, which rose against the greenback despite Japan's Prime Minister Shinzo Abe and his ruling coalition securing an election win on Sunday.
Currencies
That win ensured that Abe would stick to reflationary economic policies that are bound to weaken the yen further, analysts said. But the dollar still lost ground against the yen on low risk appetite.
Oil prices steadied above five-year lows on Monday.
The Russian ruble, meanwhile, extended heavy losses on the Moscow Exchange on Monday and crossed the 60 rubles per dollar mark for the first time. Analysts said that the prospect of the U.S. Congress contributing funding to Ukraine's battle against insurgents hurt the ruble.
The euro was last down 0.34 percent against the dollar, at $1.2416. The dollar was up 0.3 percent against the Swiss franc to trade at 0.9670 franc. The dollar was 0.35 percent lower against the yen at 118.37 yen.
The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.19 percent.
On Wall Street, the benchmark S&P 500 stock index was last down 0.4 percent.
—By Reuters