Dollar Weaker In Asia On US Shutdown, Senate Vote Expected Later In The Da
The dollar drifted weaker in Asia on Monday as a US government shutdown weighed on the greenback ahead of an expected vote in the Senate on Monday that could provide funding for three weeks.
USD/JPY changed hands at 110.65, down 0.05%, while AUD/USD traded at 0.8003, up 0.06%.
The US government shutdown on Saturday extends into the new week with all but essential services curbed and many of the regularly schedule data releases possibly delayed if the failure to provide stopgap funding continues.
The Bank of Japan starts a two-day monetary policy meeting with the decision on Tuesday expected to be closely watched for any signs the aggressive easing stance could be dialed back this year. A tweak by the Bank of Japan to its bond buying program earlier this month sparked speculation about a pullback in its monetary stimulus scheme later this year.
Investors will be focused on the outcome of monetary policy meetings by the ECB and fourth quarter growth from both the U.S., if it is released during the shutdown, and the UK. Canadian inflation data will also be in focus after last week's rate hike by the country’s central bank.
The World Economic Forum in Davos and talks on the North American Free Trade Agreement will also be closely watched for developments.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted up 0.20% to 90.49.
Last week, the dollar edged higher late Friday but ended the week near a three-year low against a basket of the other major currencies as fears over the prospect of a U.S. government shutdown weighed.
The dollar has been pressured lower by the view that the global economic recovery will outpace U.S. growth and prompt other major central banks, including the European Central Bank to begin unwinding loose monetary policy at a faster pace.
Meanwhile, sterling slid against the dollar on Friday as weak UK retail sales figures clouded the outlook for the economy