Investing.com – Most Asian currencies moved range-bound on Monday, while the dollar hovered near two-month lows as markets awaited key U.S. inflation data for more signals on when the Federal Reserve will cut interest rates.
Regional currencies firmed slightly from last week after somewhat dovish signals from Fed Chair Jerome Powell and average labor data that bolstered bets that the central bank will begin cutting rates as early as June.
The deal put significant pressure on the dollar, sending the dollar to a near two-month low, where it hovered on Monday.
The Japanese yen approached a 1-month high amid rising Bank of Japan pivot rates
It has been one of the biggest benefactors of a softer dollar, rising sharply over the past two sessions to more than a month’s high.
The yen traded at 147 per dollar on Monday, also supported by growing belief that the Bank of Japan is close to ending its policy of negative interest rates and yield curve control as early as next week.
An upward revision to data showed the Japanese economy avoided a technical recession in the fourth quarter. The strength of the economy gives the Bank of Japan more room to tighten policy earlier.
The Bank of Japan is bearish, and a Reuters report said policymakers are considering a rate hike either in March or late April.
Other Asian currencies moved in a range from flat to low. The fall was 0.2% as easing on further interest rate hikes by the Reserve Bank weighed on the currency.
Signs of slowing economic growth have also increased expectations that the RBA will cut interest rates this year.
And strengthened slightly, while the rate stabilized near a six-month high, and the key out of the country will also be ready later this week.
The dollar is stabilizing, data on the consumer price index is expected to signal a rate cut
On Monday, the index stabilized above 102 after a sharp fall last week.
The dollar was rocked by comments from Fed Chairman Jerome Powell that the central bank was close to seeing enough evidence of a decline in inflation. Powell also clarified that he does not expect inflation to reach 2% to begin considering rate cuts.
Adding to that pressure, data on Friday showed growth in February was stronger than expected. But the January value was revised significantly lower, while other indicators showed growth, indicating some cooling in the labor market.
Powell’s comments put the situation into focus on Tuesday, especially as several other Fed officials also signaled that any Fed rate cut would depend heavily on inflation dynamics.