New York, US (BBN) – The US dollar drifted mostly weaker in Asia on Wednesday as markets noted views from a key Fed policymaker on the interest rate outlook and mulled stronger than expected Japan trade figures.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted flat at 99.55, reports
USD/JPY fell 0.07 per cent to 111.64 after Japan reported exports in February rose 11.3 per cent, beating a 10.6 per cent gain expected, while imports rose 1.2 per cent, double the 0.6 per cent rise seen for the third straight month of increases.
AUD/USD traded at 0.7671, down 0.26 per cent, while GBP/USD was flat at 1.2479.
At the same time, minutes from the Bank of Japan’s January policy meeting signaled sentiment on the nine-member board that companies will modestly raise prices and wages to reflect better confidence in the economy.
Most board members also rejected any move for the BoJ to raise its 10-year government bond yield target.
The BoJ raised its growth projections in January and maintained its pledge to guide short-term interest rates at minus 0.1 per cent and the 10-year government bond yield around zero per cent.
Elsewhere, Cleveland Fed President Loretta Mester said on Tuesday that she currently envisages more than three US interest rate hikes for this year.
“I actually built into my forecast more than three as I have the economy a bit stronger than the median forecast,” Mester told reporters following an event in Richmond, Virginia.
Overnight, the dollar slumped against a basket of major currencies on Tuesday, as the Federal Reserve’s dovish comments concerning rate hikes continued to weigh on sentiment while sterling and the euro surged.
The dollar dived to a six-week low, as better than expected economic data failed to lift sentiment while a surge in sterling and euro heaped further pressure on the greenback.
The Commerce Department said on Tuesday, the current account deficit, which measures the difference in value between exported goods, services and interest payments, fell 3.1 per cent to $112.4 billion.
Economists had expected the current account deficit to shrink to $128.2 billion.
Meanwhile, FOMC member William Dudley spoke at an event in New York City, but did not discuss monetary policy.
Elsewhere, sterling and the euro surged against the greenback during the session, after better than expected UK inflation data propped up the pound while the euro gained on the back of growing optimism that centrist candidate Emmanuel Macron would see off the challenge from anti-EU candidate Marine Le Pen in the French presidential race.