Trade in Asia is curtailed by a public holiday in Japan today.
Federal Reserve Chairman Jerome Powell and Governor Lael Brainard testify before Senate committees this week regarding their appointments as chairman and deputy chairman of the Fed.
US inflation figures are due Wednesday, and the headline CPI is expected to climb to 7% year-on-year.
“The Dollar Index is expected to recover some of its Friday losses this week, amid likely offensive comments from Powell and rising US inflation“said Qi Gao, Scotiabank FX strategist. He added, however, that the greenback will likely run out of steam eventually and the index will move towards 94 when the money markets fully take into account a Fed hike. in March The Dollar Index was up 0.1% to 95,912 this morning.
Negotiations between the United States and Russia over the growing tension in Ukraine have also made traders nervous, as the two sides appear far apart and failure risks provoking an armed confrontation at the gates of the United States. ‘Europe.
the Australian dollar hovered around $ 0.7195, finding some help in rising Australian bond yields. It faces resistance around $ 0.7200 and a major barrier at $ 0.7276 which has been holding for several weeks now. The kiwi was flat at $ 0.6773.
US employment figures that weighed
The dollar was the subject of a sell-off late last week, after weaker-than-expected headline US job creation figures prompted traders to abandon their long dollar positions. However, analysts said better-than-expected unemployment figures argue in favor of higher interest rates sooner or later.
According to the CME’s FedWatch tool, traders estimate the likelihood of a rate hike in March at nearly 80% and the likelihood of another hike in June at over 70%.
The pound sterling Also weakened against the dollar, but recovered on bets that the Bank of England (BOE) is likely to hike rates in tandem with the Fed. In the latest trade, the British pound was trading at $ 1.3586, near a two-month high. MUFG strategists believe traders are overly optimistic about their rate expectations in Britain, but still believe the pound will hold up.
“We still expect two rate hikes by the BOE which should keep EUR / GBP under modest downward pressure which will result in GBP / USD moving up to the 1.40 level.“they said in an outlook note released over the weekend.
Cryptocurrencies were under pressure from widespread sales of risky assets earlier this year, but were held steady in Asia after bitcoin managed to hold steady at $ 40,000 over the weekend. Bitcoin was trading around $ 42,000 this morning and ether was trading at $ 3,173.