Dollar Rises Against Major Counterparts Ahead Of Fed Policy Meeting

(RTTNews) - The U.S. dollar firmed against its major counterparts on Monday, lifted by data showing stronger than expected manufacturing activity in April, and on hopes the Federal Reserve will raise interest rate on Wednesday.

The Fed is widely expected to raise interest rates by another 25 basis points. The focus will be on the accompanying statement for clues about the outlook for rates.

Ahead of the meeting, CME Group's FedWatch Tool is indicating an 88.9% chance the Fed will raise rates by 25 basis points and a 64.1% chance the central bank will subsequently leave rates unchanged in June.

A report released by the Institute for Supply Management showed manufacturing activity contracted for the sixth consecutive month in April, although the pace of contraction slowed by more than expected.

The ISM said its manufacturing PMI rose to 47.1 in April from 46.3 in March, with a reading below 50 indicating a contraction. Economists had expected the index to inch up to 46.6.

The Commerce Department also released a report showing an unexpected increase in U.S construction spending in the month of March.

The Labor Department's closely watched monthly jobs report is also likely to attract attention later in the week, with the report due to be released on Friday.

The dollar index climbed to 102.19, gaining more than 0.5%.

Against the Euro, the dollar strengthened to 1.0975 from 1.1019. The dollar is stronger against Pound Sterling at 1.2491, gaining from 1.2565.

Against the Japanese currency, the dollar is up, fetching 137.46 yen a unit, compared with 136.31 yen on Friday.

The dollar is weak against the Aussie at 0.6630. Against Swiss franc, the dollar is up at CHF 0.8960, and against the Loonie, it is roughly flat at 1.3547 after having firmed to 1.3656 earlier.