The U.S. dollar fell lower on Monday. The previous trading day recorded its biggest one-day gain in more than four months. Traders are preparing for this week's highly anticipated Fed policy meeting. The U.S. dollar fell against most G-10 currencies, and U.S. stocks fluctuated in flat trading. The previously published U.S. manufacturing report showed continuing supply chain challenges. This week the market focuses on the monetary policies of the United States, Australia and the United Kingdom. The Federal Reserve is expected to announce a reduction in its stimulus policy. This factor has boosted the dollar’s rise in recent weeks.

The euro was 0.42% against the US dollar at 1.162. It touched US$1.1535 last Friday, the lowest since October 13. Stephen Jen, hedge fund manager of Eurizon SLJ Capital, said in a report to clients that the foreign exchange market seems to be too hawkish about the European Central Bank's expectations and too dovish for the Fed. Due to the large number of euro long positions in the foreign exchange market, it is believed that the euro against the dollar will remain vulnerable in the coming months and quarters.

The pound fell to its lowest level against the U.S. dollar in more than two weeks, due to the uncertainty of the Bank of England’s policy stance and the escalating dispute between Brexit and France over fishing rights. Most people expect the Bank of England to raise interest rates by 15 basis points to 0.25% on Thursday. Although there may be differences in voting, some believe that the central bank may stand still and continue to send hawkish signals.

The U.S. dollar rose 0.4% to 114.44 against the yen during the intraday session, and then gave up its gains. The country’s ruling coalition won the election, which was better than many people expected. Brown Brothers Harriman's Win Thin and Ilan Solot wrote that given that the election is over and the results are considered good for the market, the Japanese asset market may return to recent trends: stocks are higher, the yen is weaker, and Japanese government bond yields are slightly higher.

The dollar fell 0.76% to 0.9091 against the Swiss franc, hitting its lowest level since August; the euro fell 0.37% to 1.0552 against the Swiss franc, close to a six-year low. JP Morgan’s Paul Meggyesi said the Swiss National Bank is expected to reduce market intervention because it wants to curb inflationary pressures.

The Australian dollar rose 0.11% against the US dollar to 0.7526, which has fallen from the nearly four-month high of US$0.75555 hit last week. The Reserve Bank of Australia will announce its policy decision on Tuesday.

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