The Dollar rose against the Yen on Monday as the Oil price's drop to a three-month low and some better US economic data generated optimism about the economy outlook. But caution ahead of Tuesday's Federal Reserve meeting to decide on US interest rates saw the Dollar ease against the Euro.
Data last week showed that the US economy expanded at an annual rate of 1.9% in Q2, up from 0.9% in Q1 of 2008. That raised outlook of higher US interest rates by the end of the year. But analysts generally expect the Fed to leave its benchmark overnight lending rate steady at 2% on Tuesday and deliver a neutral statement on future policy.
Traders will also await rate decisions from the Bank of England and European Central Bank on Thursday. ECB President Jean-Claude Trichet's statement may focus on rate-raising possibility.
Early this morning, Reserve Bank of Australia left its benchmark rate at 7.25%.
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