The dollar rose against the euro and traded near a two-month high against the yen this morning on speculation the Federal Reserve will signal tomorrow that it's close to pausing interest-rate cuts.
The US currency headed for its first monthly advance versus the yen and euro since December as traders increased bets the Fed will stop lowering borrowing costs after a quarter-percentage point reduction tomorrow.
The dollar was at $1.5570 per euro by 10:42am in London, from $1.5657 yesterday in New York, for a monthly gain of 1.3 per cent. It was little changed at 104.27 yen.
The euro fell to 162.35 yen from 163.11.
Futures on the Chicago Board of Trade show a 22 per cent chance that the Fed will hold the target rate for overnight lending between banks at 2.25 per cent tomorrow, compared with 6 per cent odds a week ago.
The balance of bets is for a reduction of a quarter-percentage point. There is a 68 percent probability the rate will be held at that level at the Fed's June meeting.
The European common currency's decline accelerated as Deutsche Bank AG, the world's largest currency trader, reported its first quarterly loss in five years after writing down the value of loans for leveraged buyouts and asset-backed securities by €2.7 billion.
Against the pound, Europe's single currency slid to 78.40 pence, from 78.62 pence yesterday.