TOKYO- The dollar wallowed near its weakest since early January against major peers on Wednesday, as Treasury yields eased amid Federal Reserve insistence that stimulus will continue despite current inflationary pressures.
The euro traded around the key $1.2250 level, holding gains from Tuesday when it pushed as high as $1.2266 for the first time since Jan. 8, as Europe’s pandemic recovery picks up pace, closing the gap with the US
The dollar index, which gauges the greenback against six rivals, languished at 89.665 early in Asia, after pushing as low as 89.533 on Tuesday.
New Zealand’s currency rose after the central bank said it would maintain stimulatory monetary policy settings until its inflation and employment targets are achieved. The kiwi dollar last traded 0.6 percent higher at $0.72692.
Meanwhile, traders will be watching the Chinese yuan after it rose to an almost three-year high of 6.3925 per dollar on Tuesday in the offshore market, before last changing hands at 6.4012.
A host of Fed officials overnight echoed the sentiments of Chair Jerome Powell that a spike in inflation will be transient and ultra-easy policy continues to be warranted.
“I have not seen anything yet to persuade me to change my full support of our accommodative stance,” Chicago Fed President Charles Evans said in a speech on Tuesday.
“Right now, policy is in a very good place,” San Francisco Fed President Mary Daly told CNBC the same day. “We need to be patient.” – Reuters
