SYDNEY- The dollar started the week with support as traders bet US inflation data and appearances from several Federal Reserve officials would bolster the case for higher interest rates.
After dipping on Friday, the greenback stood around its 200-day moving average against the euro at $1.1357 in early Asia trade on Monday. It firmed slightly on the yen to 115.65, fairly close to last week’s five-year high of 116.35 per dollar.
Trade in the Asia session was thinned by a holiday in Japan.
Federal Reserve chair Jerome Powell and governor Lael Brainard testify before Senate committees this week regarding their nominations as chair and deputy chair at the Fed.
US inflation figures are due on Wednesday, with headline CPI seen climbing to a red-hot 7 percent year-on-year.
“The dollar index is likely to recoup some of its Friday losses this week on Powell’s likely hawkish commentary and rising US inflation,” said Scotiabank FX strategist Qi Gao.
Eventually, though, he added that the greenback would probably run out of steam, and the index head towards 94 once money markets fully price in a Fed hike in March.
The dollar index last sat at 95.800.
US-Russia talks over rising tension in Ukraine also have traders on edge as the two sides seem far apart and failure risks an armed confrontation on Europe’s doorstep.
The Australian dollar was marginally weaker at $0.7179 early in the Asia session and has been held below resistance around $0.7190.
The kiwi was steady at $0.6750.
