The dollar has eased on expectations of a tightening in the policy, in the Federal Open Market Committee meeting on Jan 29 and 30.
The U.S. Fed monetary policy to take place for two days has drawn the attention of traders and investors alike.
The dollar has fallen 0.16 percent against the offshore Yuan.
The currency market is down and the market will change direction with the FOMC, says currency strategist Sim Moh Siong from the Bank of Singapore.
Investors expect a dovish attitude from the Fed Reserve. The government partial shutdown has ended temporarily and has strengthened this expectation from the Fed. Investors are now moving away from the safety of dollar investment.
On Friday, President Trump had agreed to bring the shutdown to an end temporarily. But the stop is only for 18 days before which talks must conclude.
The policymakers will get together for the first time this year in 2019. Traders expect the Fed to slacken its policies.
The dollar has slowed against the yen and was trading down by 0.8 percent last Friday. This has set the Australian dollar in a positive trend, seeing gains of 0.26 percent against the dollar.
Meanwhile, gold was trading a bit higher at a 7 month high which it touched on Friday. When interest rates tend to decrease, an appreciation in gold is usually expected. It was trading at $1300.50 per ounce in the market in early trade. It was up by 0.18 percent
The dollar index was lower against many of its major peers and was trading at 95.679, after declining by 0.8 percent on Friday.
Fed policymakers have been very cautious in their approach over the monetary tightening. Last year, the Fed had increased the interest rated 4 times. However, traders are more bearish on the dollar for the current year.
The euro was slightly higher at $1.1419.
