SYDNEY- The dollar edged higher on Monday as markets braced for US inflation data and a throng of Federal Reserve speakers this week, while the yuan nursed a hangover from Beijing’s latest underwhelming stimulus package.
Highlighting the bleak background in China, data out over the weekend showed consumer prices rose at the slowest pace in four months in October, while producer price deflation deepened.
Reports on retail sales and industrial output due on Friday should show whether Beijing’s various attempts at stimulus are having any real effect on demand.
Disappointment at the latest package had seen the Australian and New Zealand dollars slide on Friday as both countries are major exporters to China.
The US dollar stood at 7.1955 yuan having jumped 0.7 percent on Friday, and looks set to again test the 7.2000 barrier.
Trading was light with US bond markets closed for a public holiday, though stocks and futures are open.
The dollar did regain 0.5 percent on the yen to 153.43 having been dragged off last week’s top of 154.70 by the risk of Japanese intervention.
A summary of opinions from the Bank of Japan’s October policy meeting showed some members were unsure on when to raise rates again given market volatility, dimming the chance of a hike in December.
The decision will not be made any easier by political uncertainty as Japanese lawmakers should decide on Monday whether Prime Minister Shigeru Ishiba remains leader after his coalition lost its parliamentary majority late last month.
The dollar index was a fraction firmer at 105.05, after gaining 0.6 percent last week mainly against the euro. The single currency was stuck at $1.0715 having shed 1 percent last week to as low as $1.0683. Support now lies around $1.0667 and $1.0601.
