NEW YORK—The Federal Reserve’s bias for loose monetary policy is likely to keep the dollar trapped in a downdraft this week, just as hawkishness on inflation and looming interest-rate increases in Europe enhance the euro’s luster.
Low U.S. interest rates and the possibility of an oil-driven jump in inflation have deprived the dollar of safe-haven investment flows that usually benefit the currency during times of global unrest. Risk-aversion will likely continue to benefit the Swiss franc and Japanese yen, for now.
Investors are searching for currencies that offer both stability and higher yields, which makes the euro a comparatively attractive …
Low U.S. Rates to Keep Pressure on Dollar – WSJ.com.