- Expectations for an interest rate hike from the Federal Reserve have provided some support to the dollar.
- Concerns related to a trade war, however, could weigh on the currency in the longer term.
The dollar index finished last week with slim gains ahead of the Federal Reserve's highly anticipated meeting this week, with investor expectations for interest rate hikes providing some support.
Other factors in the mix include a flurry of recent personnel changes at the White House, including top economic advisor Gary Cohn's resignation.
The man tapped to be Cohn's replacement, Larry Kudlow, told CNBC last week that he favored a strong dollar and had "no reason to believe [President Donald Trump] doesn't favor a sound and strong and steady dollar."
Trade-related concerns in the market could also weigh on the currency in the longer term.
Investors are worried that recent tariffs implemented by Trump on steel and aluminum imports could result in retaliatory actions from U.S. trading partners, including China and the European Union.
As of Monday morning in Asia, the dollar index was down around 2.07 percent so far this year and had declined 10.05 percent compared to one year ago.