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US dollar advance bogs down, US jobs report comes into view
[TOKYO] The US dollar stood little changed early on Wednesday, its modest advance from the previous day bogging down as investors started to take a wait-and-see attitude ahead of Friday's US jobs report.
The US dollar hit a two-month high against a basket of key currencies last week as Federal Reserve officials talked up the chances of a rate hike this month, but the greenback is now sitting in a narrow range with a hike seen mostly as a done deal.
"The dollar's upside looks limited as the market has almost fully priced in a March rate hike, with focus now shifting to how many times the Fed can tighten policy this year," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.
"With attention on whether the Fed can conduct three hikes this year, Friday's jobs data will provide important cues as to whether an inflation-inducing wage increase is taking place."
The US dollar was nearly flat at 113.925 yen after rising modestly to 114.160 overnight.
The euro was virtually unchanged at US$1.0569 after declining about 0.1 per cent the previous day.
The US dollar index, which hit a two-month peak of 102.260 last Thursday, was steady at 101.820. It gained about 0.15 per cent overnight, when the US dollar was buoyed by declines in its European peers.
The pound slid to a seven-week trough on Tuesday after weak consumer spending data added to worries that Britain's economy is slowing as it prepares to trigger its exit from the European Union. Sterling stood flat at US$1.2202 after dipping 0.3 per cent overnight.
The Swiss franc also retreated to multi-week lows, hurt by a rise in the Swiss National Bank's foreign exchange reserves and statements from SNB Chairman Thomas Jordan that the franc was "significantly over-valued".
The Australian dollar rose 0.1 per cent to US$0.7592. The Aussie had spiked to US$0.7633 the previous day after the Reserve Bank of Australia kept interest rates on hold and gave an upbeat assessment of the economy, hinting that it does not intend to loosen policy this year.