SINGAPORE- The US dollar was subdued on Tuesday as traders resisted placing large bets ahead of a slew of economic data this week, while the yen languished near levels that triggered intervention last year.
Against a basket of currencies, the dollar eased 0.058 percent to 103.87, after slipping 0.2 percent on Monday.
The index is up 2 percent this month and is coming off a run of six straight weeks of gains as resilient US economic data bolstered expectations that rates may stay higher for longer.
That view gained more traction after Federal Reserve Chairman Jerome Powell suggested on Friday that further interest rate increases may be needed to cool still-too-high inflation, though his promise to move with care at upcoming meetings provided for some uncertainty.
With the US central bank highlighting the rate path will be heavily dependent on data, the spotlight will be on a batch of economic indicators this week, including payrolls and personal consumption expenditure.
Data dependent central banks keep the currency market susceptible to the latest major indicators, strategists from BofA Global Research said in a note.
“Should US growth begin to soften the market will re-focus on sooner rate cuts from the Fed. Conversely, resurgent inflation could pose over-tightening risks globally, introducing greater ‘hard landing’ risks.”
First up is job openings figures for July later in the day. Economists polled by Reuters expect job openings to come in at 9.465 million, easing slightly from June.
Carol Kong, currency strategist at Commonwealth Bank of Australia, said stronger-than-expected job data could boost market pricing for another Fed rate hike and push up the dollar.
