Investing.com – The dollar remained steady ahead of Federal Reserve new head Jerome Powell’s news conference on Wednesday, from which investors expect a rate hike this month and will find cues whether there will be three or four rate hikes this year.
The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 89.89 at 11:07pm ET (03:07 GMT), down 0.13%. The dollar extended last year’s slide into 2018, but is likely to find support as the FOMC meeting is expected to reaffirm its monetary tightening policy.
While the Fed is poised to raise interest rates this week, most Asian central banks are unlikely the follow suit, according to reports. China and Japan see little reason for rate hikes, and the minutes from the Reserve Bank of Australia indicated that the Bank does not intend to change its policy.
The USD/JPY pair shed 0.07% to 106.47. The greenback has weakened against the yen in 2018 despite expectation of three or even four rate hikes in the U.S. and the commitment to an ultra-loose monetary policy by the Bank of Japan (BOJ).
BOJ’s deputy governor Masayoshi Amamiya’s remarks garnered some attention on Wednesday as he said the BOJ has not ruled out the possibility of adjusting the yield curve when asked if the BOJ could adjust rates before inflation reached the 2% target. Meanwhile, the Bank’s governor Haruhiko Kuroda said policy normalisation is far away.
The AUD/USD pair traded at 0.7691, up 0.09%. The Aussie picked up a little after the release of the Reserve Bank of Australia’s minutes. The central bank remained cautious about a stronger Aussie hampering inflationary efforts, but was optimistic about the GDP growth beating expectation in 2018.
Elsewhere, The People’s Bank of China set the fix rate of yuan against the dollar at 6.3396 versus the previous day’s 6.3396. The USD/CNY pair eased 0.07% to 6.3293.
U.S. President Donald Trump is expected to unveil up to $60 billion in import duties on Chinese products by Friday, according to reports. Investors keep an eye on the U.S.-China relations to see if the move would spark a trade war.