New York, US (BBN) – The US dollar hovered around three-week highs in Asia on Monday with geopolitical tensions in focus as the US moved an aircraft carrier group closer to the Korean peninsula and as concerns linger over a missile strike on a Syrian airbase last week remain.
In Japan, the February unadjusted current account balance surplus jumped to the largest since March 2016 at ¥2.814 trillion, compared to ¥2.616 trillion seen, reports
USD/JPY rose 111.44, up 0.31 per cent, while AUD/USD changed hands at 0.7485, down 0.15 per cent.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.11 per cent to 101.19.
It is an otherwise light regional data day home loans dropped 0.5 per cent in February, missing the expected 0.1 per cent month-on-month gain. As well, remarks by Bank of Japan Governor Haruhiko Kuroda that the economy should continue on a moderate recovery trend were noted.
“Our country’s economy is continuing its moderate recovery trend,” Kuroda said, adding that it would “turn into a moderate expansion” in the future, he said, adding he expects inflation will head toward 2 per cent on improving demand-supply conditions.
Also at an event in Australia, St. Louis Federal Reserve President James Bullard repeated his view that the United States is in a low-growth, low-productivity regime likely to last for the foreseeable future and requiring no rush to raise interest rates.
Later on Monday Fed Chair Janet Yellen is scheduled to speak at the University of Michigan with investors looking for fresh cues on the timing of the next US rate hike and plans to trim the bank’s balance sheet, particularly after weaker than expected jobs data on Friday.
Last week, the dollar rose against a basket of the other major currencies on Friday, shrugging off disappointing U.S. employment data as investors remained focused on the Federal Reserve’s plans to tighten monetary policy.
The Labor Department reported on Friday that the US economy added just 98,000 jobs last month, the fewest since last May and well below the forecast for jobs growth of 180,000. Lower temperatures and winter storms accounted for the slowdown in hiring.
The unemployment rate ticked down to a 10-year low of 4.5 per cent, pointing to underlying strength in the labor market.
The dollar initially sold off following the release of the weaker-than-anticipated employment data before regaining ground.
The dollar remained supported after New York Fed President William Dudley said on Friday that plans to trim the Fed’s balance sheet later this year would prompt only a “little pause” in its rate hike plans.
Demand for the dollar was also underpinned by some safe haven demand in the wake of US cruise missile strikes on a Syrian air base.