Dollar gains as investors await more clues from Fed chair testimony

© Reuters.

By Zhang Mengying – The dollar rose in early Asian trade on Wednesday, with investors now awaiting clues on monetary policy from the Federal Reserve chair to Congress.

Tracking the greenback against a basket of other currencies edged up 0.15% to 104.377 as of 11:21 p.m. ET (3:21 a.m. GMT).

The pair was down 0.35% at 136.13, having touched 136.71 in early trade, its lowest since October 1998.

The Bank of Japan maintained ultra-low interest rates last week and vowed to defend its yield curve control (YCC) policy, sending the yen lower.

However, Japanese Finance Minister Toshi Suzuki said on Tuesday he was concerned about a sharp weakening in the yen and would react to currency moves if necessary.

“USD/JPY continues to trade on Treasury yields, which have been steady, but 10-year yields remain above 3.20%, and BOJ has done a lot to defend YCC,” Saxo Markets Hong Kong Strategist Redmond Wang told Reuters. “

The pair lost 0.71% to 0.6920 and the pair shed 0.87% to 0.6274. Lower commodity prices such as iron ore continued to weigh on the Australian dollar.

The pair was up 0.37% at 6.7145, while the pair inched down 0.27% to 1.2238.

Federal Reserve Chairman Jerome Powell will begin his two-day testimony before Congress later in the day, and investors will want to see more clues on whether the Fed will raise interest rates by another 75 basis points.

Richmond Fed President Thomas Barkin said the central bank should raise rates as soon as possible without undue harm to financial markets or the economy.

Elsewhere, ECB Chief Economist Philip Lane said the ECB will raise rates by 25 basis points at its July meeting, while the magnitude of the September hike remains to be seen, suggesting a potentially larger 50 basis point hike .

The Federal Reserve’s aggressive monetary policy sparked fears of slowing economic growth, and Tesla (NASDAQ: ) Inc. warned the U.S. was heading for a recession.

In cryptocurrencies, the price is $20,600.

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