SYDNEY- The dollar clung to a late week bounce on Monday as investors braced for January’s US Federal Reserve meeting and raised bets it will chart a year ahead holding several rate hikes, while China surprised analysts with a benchmark cut.
Chinese economic growth data, due later on Monday (0200 GMT), a Bank of Japan policy meeting which concludes on Tuesday, British inflation data on Wednesday and Australian jobs figures on Thursday are also in view as traders gauge the global policy outlook.
The dollar was 0.2 percent higher at 114.45 yen early in the Asia session, about 0.8 percent above a Friday low. It also edged about 0.1 percent firmer on the euro to $1.1403.
The moves follow the dollar’s jump on Friday along with US yields and underscore support for the greenback from the hawkish rates outlook, even if momentum for gains has started to wane.
The US dollar index, which declined sharply last week until Friday’s leap, sat at 95.225 in Asia on Monday.
“Friday’s move suggest to me that the interest rate driver for dollar strength is not dead and buried,” said National Australia Bank’s head of foreign exchange strategy Ray Attrill.
He said it may not necessarily return to drive new dollar highs, but added: “We’ve had a hawkish twist out of every Fed meeting since June last year.”
