Dollar weaker in Asia ahead of Fed policymakers, risks weighed
The dollar trended weaker in Asia on Tuesday with the Fed squarely in focus as policymaker speeches loom, though an extraordinary day of news about Russianmeddling in the presidential election raised political risk.
Chicago Fed President Charles Evans said the central bank will likely wait until June to decide on the next rate hike in comments made ahead ofa slate of Fed policymaker remarks due on Tuesday. New York Fed President William Dudley speaks at 6:35 a.m. in London, while Boston Fed President Eric Rosengren speaks in Bali, Indonesia. Kansas City Fed President Esther George speaks on the economy at noon and Cleveland Fed President Loretta Mester speaks at 6 p.m. ET.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.14% to 100.02. USD/JPY changed hands at 112.60, up 0.04%, while AUD/SUD traded at 0.7719, down 0.16% despite minutes of the Reserve Bank of Australia's March policy meeting that reinforced market views that policy bias was neutral to a hike as the next move.
Overnight, the dollar recovered from early session losses to trade slightly higher against a basket of major currencies on Monday, as sterling slipped, following news that Article 50 will be triggered next week, while a softer tone on protectionism from G20 financial leaders at the weekend weighed on upside momentum.
The dollar came under pressure in early morning trade, as events from last week continued to weigh on sentiment not least the Federal Reserve’s surprisingly dovish comments concerning the pace of the rate hikes this year.
The Federal Reserve last Wednesday, stuck to its previous forecast of two more rate hikes this year against expectations from market participants of three rate hikes. Meanwhile, a policy statement from G20 financial leaders, heaped further pressure on the greenback, after the group of twenty dropped a pledge to keep global trade free and open from a policy statement at the weekend.
Elsewhere, the pound tumbled against the dollar, after Downing Street said UK Prime Minister, Theresa May, will officially notify the European Union (EU) next Wednesday that the UK is leaving the EU by triggering Article 50 – the legal process by which the UK leaves the EU. On Tuesday in Asia, GBP/USD tradeed at 1.2372, up 0.11%.