On the other hand, potential bans on Russian gas kept the euro within sight of its 2022 lows
The dollar was down on Monday morning in Asia. However, it started the week on a firm foot as U.S. Treasury yields rose over expectations that the U.S. will further tighten its monetary policy.
On the other hand, potential bans on Russian gas kept the euro within sight of its 2022 lows.
The U.S. Dollar Index edged down 0.08% to 98.547 by 3:41 AM GMT.
The USD/JPY pair inched up 0.13% to 122.66. The AUD/USD pair inched up 0.17% to 0.7512 and the NZD/USD pair inched up 0.12% to 0.6936. The USD/CNY pair was steady at 6.3632, with Chinese markets closed for a holiday. The GBP/USD pair edged up 0.05% to 1.3118.
The euro continues to be weighed down by concerns that Russia’s invasion of Ukraine on Feb. 24 will continue to impact economic growth. It last bought $1.1047, not too far from March’s almost two-year low of $1.0806.
German foreign minister Annalena Baerbock said on Sunday that the European Union must discuss banning imports of Russian gas, which will likely drag further on economic growth and the euro.
Negative news on the war or a further lift in energy prices could see EUR/USD test $1.0800, Commonwealth Bank of Australia analysts said in a note.
However, an improvement in sentiment or a weak dollar following the U.S. Federal Reserve minutes could push EUR/USD through upside resistance around $1.1150, they added, in reference to the central bank’s minutes from its latest meeting, due to be released on Wednesday.
The possibility of new sanctions meant investors remained cautious in early trade. The dollar was also slightly up against the riskier Australian and New Zealand dollars as cooling export prices eases gains for the Antipodean currencies.
Friday’s U.S. jobs report was stronger than expected, with non-farm payrolls rising by 431,000 and the unemployment rate at 3.6%, in March.
Further data also showed that the Institute of Supply Management manufacturing purchasing managers index (PMI) for March was 57.1, while the manufacturing PMI was 58.8. The data was enough to spur bets that the U.S. Federal Reserve will continue to tighten its monetary policy.
Fed funds futures have priced a near four-in-five chance of a 50-basis point hike in May and two-year yields stand at a three-year high of 2.4930%.