The U.S. Dollar firmed versus its major peers during Tuesday’s Asian trading session even as FX traders await further evidence that the economic recovery remains on track and reaffirms that the Federal Reserve’s decision to taper is the appropriate one. Weaker than expected data recorded over the past several weeks has raised the uncertainty level among investors. Later today, the attention will turn to the release of two key pieces of data, the consumer confidence reading and the housing price index, with analysts polled expecting a slight drop in consumer confidence levels but an increase in the housing price data; a disappointment will increase uncertainty as regards the Fed’s plans.
As reported at 10:31 a.m. (JST) in Tokyo, the U.S. Dollar Index was priced at 80.21 .DXY, range bound within the week’s low and high of 79.93 .DXY and 80.42 .DXY; the greenback is getting some support from the demand for safe haven currencies in the wake of the political instability in the Ukraine. The USD/JPY was also range bound, most recently trading at 102.47 Yen and currency strategists believe support will be for the greenback over the Yen, given the Bank of Japan’s inclination to continue easing.
Fed Chief to Testify
Also ahead later this week is the appearance of the new Federal Reserve chief in front of the U.S. Senate’s banking committee; Ms. Yellen is expected to continue to tout the monetary policy espoused by her predecessor, Ben Bernanke, and suggest that the recent softness in the U.S. economy is likely a temporary phenomenon, and might even be attributed to the recent harsh weather.