Dollar droops as key US data looms; yen firms on CPI beat

dollar droops as key us data looms; yen firms on cpi beat

FILE PHOTO: U.S. Dollar banknote is seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

By Kevin Buckland

TOKYO (Reuters) – The dollar traded on the back foot on Tuesday, as markets looked ahead to a week of key U.S. economic data that will provide fresh signals on how soon the Federal Reserve may begin cutting interest rates.

The yen firmed slightly after figures showed consumer inflation stayed at the Bank of Japan’s 2% target, rather than dipping below it for the first time in nearly two years, as economists had forecast.

The U.S. dollar index, which measures the currency against a basket of peers including the yen and euro, traded flat at 103.78 early in Asian time, following a 0.17% slide on Monday.

Markets have all but ruled out a cut at the Fed’s March meeting and have recently pushed back expectations for a cut to June from May, CME’s FedWatch Tool showed, following strong U.S. consumer and producer price data.

U.S. durable goods data is due later on Tuesday, while January’s U.S. personal consumption expenditures price index, which is the Fed’s preferred measure of inflation, will be released Thursday.

“A still softish DXY (dollar index) doesn’t quite convey the USD’s story right here … and, if anything, key upcoming event risk can potentially fuel another leg up,” Westpac’s head of FX strategy, Richard Franulovich, wrote in a note.

“The bulk of DXY’s gains this year have unfolded over just a handful of marquee sessions, and outside that it has been decidedly consolidative,” he said. “The lacklustre DXY in recent days looks mostly like a continuation of that profile.”

The Australian and New Zealand dollars sagged. The Aussie lost 0.1% to $0.6533, continuing its decline from Thursday’s three-week high of $0.6595.

The kiwi eased 0.2% to $0.6161, after touching the highest since Jan. 15 at $0.6218 on Thursday.

Traders are gearing up for what could turn out to be a significant policy meeting by the Reserve Bank of New Zealand (RBNZ) on Wednesday. Markets are pricing in a one-in-three chance the RBNZ will raise its 5.5% official cash rate to combat stubborn inflation.

Cryptocurrency bitcoin hugged a more than two-year peak of $54,969 hit overnight, after enterprise software firm MicroStrategy Inc announced it had bought about 3,000 more of the tokens.

The dollar slipped 0.1% to 150.54 yen as a slightly hotter-than-expected reading for Japan’s January consumer price index (CPI) kept the BOJ on track to exit negative interest rate policy as soon as next month.

The euro was little changed at $1.0847, and sterling was flat at $1.26825.

(Reporting by Kevin Buckland; Editing by Shri Navaratnam)

News Related


From arts to sciences: Once a teacher, always a teacher

Despite doing education at the university, Mellon Kenyangi, also known as Mama Bear, did not think of going to class, and teaching students was her dream job.“Since it was not ... Read more »

WC squad was picked on players’ performance, says Pramodya

213 Sri Lanka Cricket’s Chairman of Selectors, Pramodya Wickramasinghe reported to the Sports Ministry’s Special Investigation Unit( SMSIU) for the Prevention of Sports Offences yesterday for the second day. He ... Read more »

Malindu Dairy bags Industrial Excellence Silver Award

137 Malindu Dairy (Pvt) Ltd., a leading food production company in Sri Lanka, won the Silver Award in the medium-scale dairy and associated products category at the Industrial Excellence Awards ... Read more »

Africans Urged to Invest Among themselves, Explore Investment Opportunities in Continent

Africans Urged to Invest Among themselves, Explore Investment Opportunities in Continent Addis Ababa, November 27/2023(ENA)-The Embassy of Angola in Ethiopia has organized lecture on the “Foreign Investment Opportunities in Angola ... Read more »

Mohan Wimalaratne will lead Police this season

144 The dynamic front row player Mohan Wimalaratne will lead the Police Sports Club Rugby team at the upcoming Nippon Paint Sri Lanka Rugby Major League XV-a-side Rugby Tournament scheduled ... Read more »

Church assists the disabled in Bulawayo

Dozens of people living with disabilities from New Hope Inclusive in Entumbane, Bulawayo on Saturday last week received an early Christmas gift in the form of groceries. The groceries were ... Read more »

Somalia Joins East African Community

The East African Community (EAC) Summit of Heads of State has admitted the Federal Republic of Somalia to the regional bloc, making it its 8th member country. The decision was ... Read more »
Top List in the World