Dollar Loses Ground; Eyes on U.S. Inflation Data
The dollar continued its downward trend in Asia on Tuesday morning, with the U.S. dollar index dropping below the 90 mark as concerns over a potential trade war caused by new U.S. tariffs on imported steel and aluminum faded.
Investors are also looking ahead to U.S. inflation data overnight Asia time for clues on how fast the U.S. Federal Reserve might raise rates.
The U.S. dollar index that tracks the greenback against a basket of six major currencies slipped 0.01% to 89.88 at 10:58pm ET.
Eyes would also be on month-on-month U.S. Core Consumer Price Index (CPI) data for hints on U.S. inflation. A higher-than-expected reading would give the greenback a lift and give the market some guidance on how the Fed might react.
The USD/JPY pair traded 0.01% lower at 106.40. A political scandal in Japan involving Finance Minister Taro Aso also got some attention today. Aso was involved in a scandal involved some altered documents related to the sale of public land at a large discount to a school operator linked to the wife of Prime Minister Shinzo Abe. Despite public pressure, Aso has said he does not intent to resign.
The market is also looking forward to Wednesday, when the Bank of Japan would also release minutes of its latest monetary policy meeting.
The AUD/USD pair traded 0.13% higher at 0.7883. The Aussie received a modest boost from the upbeat National Bank of Australia (NAB) February Business Survey data that came in at 21 versus the previous 19, although business confidence slightly slid from 12 to 9.
Elsewhere, The People’s Bank of China set the fix rate of yuan against the dollar at 6.3218 versus Friday’s 6.3333. The USD/CNY pair was quoted at 6.3227, down 0.09%.