Singapore, March 6 (BNA): The US dollar fell broadly on Monday as investors await testimony from Federal Reserve Chairman Jerome Powell and look ahead to the February jobs report at the end of the week which is likely to influence how hawkish the US central bank is. it will be.
The dollar index, which tracks the greenback against six major peers, was down 0.182% at 104.420. Last week, the index posted a weekly loss for the first time since January, Reuters reports.
After executing huge hikes last year, the Fed raised interest rates by 25 basis points in its last two meetings, but a slew of resilient economic data has raised market fears that the central bank may return to its aggressive path.
Futures indicate a 72% chance that the Fed will raise interest rates by 25 basis points at its meeting on March 22nd.
The strong spotlight will be on the February jobs report due on Friday and Fed Chair Jerome Powell’s testimony before Congress on Tuesday and Wednesday.
“US core inflation remains stubbornly high, well above the federal inflation target of 2%,” said Joseph Capurso, head of international and sustainable economics at the Commonwealth Bank of Australia.
Recent data suggests consumer spending is not slowing much, Capurso said in a note, while the labor market is unsustainably tight, adding that Powell is likely to be hawkish in his testimony.
Citi strategists expect Powell to indicate a preference for a 25 basis point hike but leave all options on the table, as he will speak before the jobs data is released.
Citi expects a payroll increase of 255,000 after January’s massive jump of 517,000. Citi said a big surprise to the upside could lead to a 50 basis point Fed hike.
Meanwhile, the euro rose 0.07% to $1.0641, after rising 0.8% last week, while the British pound was last trading at $1.2029, down 0.09% on the day.
The Japanese yen rose 0.10% to 135.74 per dollar, ahead of Friday’s final policy meeting of Bank of Japan Governor Haruhiko Kuroda.
Saxo Markets strategists said that if Kuroda ends his term on a very dovish note, it could cause problems for the yen, especially if US yields continue to rise this week.
Elsewhere, China’s yuan weakened on Monday, a day after the country set a modest target for economic growth for 2023 of around 5%. In the spot market, the local yuan opened at 6.9072 per dollar and was last traded at 6.9137.
In cryptocurrencies, bitcoin rose 0.53% to $22,363.00, after falling 5% on Friday. Ethereum, last fell 0.02% to $1,559.00.
The Australian dollar fell 0.21% to $0.675, while the New Zealand dollar was last trading at $0.621, down 0.16%.