Written by Kevin Buckland
TOKYO (Reuters) – The U.S. dollar weakened on Monday, buoyed by lower U.S. Treasury yields, as traders awaited more important economic data for fresh clues on when the Federal Reserve will cut interest rates. It fell under pressure.
Bitcoin has soared to its highest level in more than two years on the back of large inflows into crypto exchange-traded funds (ETFs).
The euro firmed following Friday’s 0.33% gain as the European Central Bank’s policy decision looms on Thursday.
The yen was trading at around 150 yen to the dollar as investors waited to see if the Bank of Japan would lift its negative interest rate policy this month.
The dollar index, a measure of the currency against six major currencies including the euro and yen, fell 0.07% to 103.79 in early Asian trading, near the bottom of last month’s range of 103.43 to 104.97.
On Friday, the index fell 0.26% on weaker manufacturing and construction spending indicators.
This also weighed on U.S. Treasury yields, removing further support for the dollar and sending the benchmark 10-year Treasury yield down to 4.178% for the first time in two weeks. The yield on Monday was about 4.19%.
“Bias appears to be tilting towards a pro-range test” ahead of this week’s major macro policy announcements and Fed Chairman Jerome Powell’s annual testimony to Congress, Westpac strategists said in a note to clients.
The note said that to keep the dollar index within its current range, “the market would need a significant change in the data for range support to suggest anything other than a new buying opportunity.” Probably.”
This week, the ISM statistics for manufacturing and services will be released on Tuesday, followed by the main event: monthly payroll statistics on Friday.
Meanwhile, traders appreciated Bank of Japan Governor Kazuo Ueda’s cautious comments since last weekend that it was too early to conclude that the central bank’s inflation target was close to being achieved, with the dollar trading at 0.09. % to 149.99 yen.
This was in contrast to the hawkish remarks of Bank of Japan board member Hajime Takada earlier in the day, which caused the yen to soar to 149.21 yen to the dollar, its highest level in more than two weeks.
Markets are considering whether the Bank of Japan will end its negative interest rate policy at its March 18-19 meeting or wait until April or later.
Elsewhere, the euro was little changed at $1.08425, near the top of its recent range.
Most economists expect the ECB to first cut interest rates at its June meeting, but will be hoping for further clues about the timing at a press conference from central bank governor Christine Lagarde.
Bitcoin was trading at $63,500, up about 1.5% from Sunday, before hitting $64,284.75, its highest level since November 2021, the same month it hit an all-time high of $68,999.99. I set a high price.
(Reporting by Kevin Buckland; Editing by Jacqueline Wong)
