NEW YORK: The dollar edged up against major currencies on Monday, on expectations for further stimulus from the European Central Bank in what has been a strong month for the greenback.
Trading was subdued during Monday's session, with the dollar moving in tight ranges against most rivals. The dollar index , which measures the greenback against six major world currencies, rose 0.15 percent to 100.170 after touching a new 8-1/2-month high of 100.310 overnight.
The index has risen more than 3 percent this month, backed largely by anticipated policy divergence between the ECB and U.S. Federal Reserve. Friday's jobs report, should it meet expectations, would boost expectations for a Fed interest-rate increase.
Sireen Haraji, currency strategist at Mizuho Corporate Bank in New York, added that secondary factors, including the dovishnesss of the Bank of Japan, also contributes to dollar strength.
The ECB will meet on Thursday and is widely expected to cut interest rates on euro deposits and extend its quantitative easing program. Other measures that would weaken the euro zone currency are also reportedly being considered.
By contrast, the Fed is expected to raise U.S. interest rates for the first time in almost a decade later in December, based on a succession of data shows the U.S. economy growing at a healthy pace.
The euro fell 0.2 percent versus the dollar on Monday and has fallen 4 percent against the greenback in November.
The dollar rose similarly against the Japanese yen on Monday, gaining 0.2 percent to rise to 123.06 yen per dollar. The dollar grew 2 percent against the yen in November.
The IMF announced on Monday it had decided to include China's yuan, or renminbi, in its special drawing rights currency. The move should bolster the yuan's political clout and standing as a global currency, analysts said.
"(The decision) is somewhat puzzling, but it does add a scope of legitimacy to the yuan as a global currency," said Malcolm Polley, chief investment officer at Stewart Capital Advisors in Indiana, Pennsylvania.
"It should mean better capital flows, both directions, and it actually, I think, helps the people of China from a currency standpoint."
The offshore yuan rose slightly after the IMF's announcement. It gained 0.3 percent against the dollar during U.S. trading to rise to 6.4245 yuan per dollar.
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