At the start of a week in which the Federal Reserve is expected to largely keep interest rates stable, the foreign exchange market is caught in a downward trend. However, traders have their sights set on the ramifications of U.S. President Donald Trump's tariff plans

Trump said last week that he could impose tariffs on products from Canada and Mexico starting on February 1. This announcement reinforces the position of the greenback this new week.

Elsewhere, the euro was down 0.2% to $1.046725 ahead of a European Central Bank monetary policy meeting this week that is expected to reduce borrowing costs. The British pound last hit $1.24505

This left the dollar index, which measures the American currency in relation to six units, at 107.6, still close to the one-month low it hit last week.

Australian and New Zealand dollars fell slightly but stayed closer to their one-month highs reached last week.

The Japanese yen was trading at 155.88 per dollar after the Bank of Japan pushed its key interest rate to the highest level since the global financial crisis and raised its inflation forecasts.

The Chinese yuan fell on Monday after reaching its highest level in two months against the dollar, in restricted trade due to the holidays, as US President Donald Trump's retaliation plan against Colombia revived wider fears of American tariffs against key trading partners. At 03:27 GMT, the onshore yuan was down 0.33% at 7.2621 per dollar, compared to a high of 7.2363 reached in the previous session on Friday, the highest level since November 29. On the offshore market, the yuan traded at 7.2641, down by

The 1-month undeliverable futures contract indicated that the rupee would open at nearly 86.30 per US dollar compared to Friday's close at 86.2050.