The Dollar fell against a basket of currencies on Monday, breaking a three-day rally, as buyers retreated to the sidelines ahead of key economic data and awaiting the Federal Open Market Committee (FOMC) statement and rate decision.
The policy-setting FOMC is widely expected to cut the benchmark overnight lending rate by only 25bp to 2%.
ECB President Jean-Claude Trichet and Governing Council member Yves Mersch both said risks to price stability remained on the upside, with Trichet adding that there were no grounds for complacency. Their comments suggested the ECB is not ready to start cutting interest rates from 4% soon, even with regional data pointing to an inflation slowdown in four German states for April.
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