TOKYO- The US dollar drifted within a tight range on Monday, pressured by lower Treasury yields, as traders waited for more crucial economic data for fresh clues on the timing of Federal Reserve interest rate cuts.
Bitcoin rose to a more than two-year peak amid big flows into cryptocurrency exchange-traded funds.
The euro was firm following Friday’s 0.33 percent advance, with a European Central Bank policy decision looming on Thursday.
The yen fluctuated around the closely watched 150 per dollar level, as investors tried to assess whether the Bank of Japan’s exit from its negative interest rate policy could happen as soon as this month.
The dollar index – which measures the currency against six major peers, including the euro and yen – was little changed at 103.85 as of 0530 GMT, oscillating narrowly in the bottom half of it 103.43-104.97 range of the past month.
The index lost 0.26 percent on Friday following some weak manufacturing and construction spending data.
That also weighed on Treasury yields, removing additional support for the dollar, with the benchmark 10-year yield sliding as low as 4.178 percent for the first time in two weeks.
The yield stood around 4.2 percent on Monday.
“Bias appears to be swinging towards a test of range support,” in the lead up to key macro releases this week, as well as Fed Chair Jerome Powell’s testimony to Congress, Westpac strategists wrote in a client note.
“However, markets will need a major shift in data to suggest that range support will be anything other than another buying opportunity,” that will keep the dollar index within its current range, the note said. – Reuters
