Dollar trims gains but remains supported

Investing.com – The dollar trimmed gains against a basket of the other major currencies on Monday, but the greenback still remained broadly supported amid ongoing concerns over the outlook for global growth.

Market sentiment was hit amid declining oil prices as hopes faded for a deal between major producers to curb a massive supply glut.

Meanwhile, a report showing that euro zone investor confidence deteriorated sharply this month highlighted the problems in the global economy.

The hit a 10-month low in February, dropping from 9.6 to 6.0.

Stocks globally have had a rough start to 2016, hurt by tepid U.S. growth, falling oil prices, and concern the world faces a China-led slowdown.

The euro fell to the day’s lows, with down 0.19% at 1.1136.

The dollar was weaker against the yen, which tends to be bought by investors in times of risk aversion, with retreating 0.92% to 115.81.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14% to 97.11, after rising to highs of 97.50 earlier in the day.

The index ended the previous week down 2.61%, the largest weekly percentage decline since October 2011 as weak U.S. economic reports and dovish comments by a Federal Reserve official raised doubts over how much the central bank could raise interest rates this year.

But the greenback moved higher on Friday boosted by the largely upbeat for January.

A pick-up in wage growth to a one year high bolstered the outlook for inflation and increased the likelihood that the Fed could make further rate hikes in 2016.

Higher interest rates would make the dollar more attractive to yield-seeking investors.

The dollar was higher against the pound, with down 0.72% to 1.4399 and was steady against the Swiss franc, with at 0.9910.

The commodity linked currencies were mixed to higher against the greenback.

was up 0.22% at 1.3946. edged up 0.13% to 0.7077 and fell 0.17% to 0.6613.

Statistics Canada reported on Monday that increased by 11.3% in December, exceeding expectations for a 5.6% gain. Building permits dropped by 19.9% in November, whose figure was revised from a previously estimated 19.6% decline.

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