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MORNING BELL: USD rises against a basket of currencies

The dollar advanced on Monday, rising against a basket of currencies for a third straight session, as traders focused on potential U.S. interest rate hikes and shook off worries about a China-led "currency war." Against the euro, the dollar traded at its strongest in five days, reaching $1.1063 per euro before easing to $1.1073, still up around 0.30% on the day. The euro is expected to remain weak as the European Central Bank presses on with a 1 trillion euro asset-purchase program. The greenback was ahead 0.10% against the Japanese yen at 124.45 yen and up 0.35% against sterling at $1.5587.

The Brazilian real was little changed on Monday after anti-government protests on Sunday did little to sway investor sentiment over the political risk outlook in Latin America's largest economy. Other currencies in the region weakened slightly, though Chile's peso saw a nearly 1% loss against the dollar, partly due to a 1% fall in the price for copper, the country's main export. Brazil's real fluctuated in early trading before settling near the 3.48 per dollar level by mid-afternoon, nearly unchanged from Friday's close.

The Canadian dollar was little changed against the greenback despite weaker crude prices on Monday, as investors paused following last week's market volatility ahead of some key domestic data coming later in the week. U.S. light crude oil settled below $42 a barrel, pressured in part by a stronger greenback and news that the economy of Japan, the world's No. 3 oil consumer, shrank in the second quarter. China, another top oil consumer, also remained a drag. Canada is a major oil producer. The Canadian dollar which was stronger than most other key commodity counterparts, finished at C$1.3085 to the greenback.



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