The dollar index decreased by 0.07% to 103.79, approaching the bottom of the 103.43-104.97 range seen in the previous month
On Monday, the U.S. dollar weakened due to lower Treasury yields, while traders awaited important economic data for insights on potential Federal Reserve interest rate adjustments.
Bitcoin reached a two-year high with significant investments in crypto currency exchange-traded funds.
The euro remained strong after a 0.33% increase on Friday, as the European Central Bank prepared for a policy decision later in the week.
The yen hovered near 150 per dollar, as investors speculated on the Bank of Japan potentially ending its negative interest rate policy this month.
The dollar index, which compares the currency to six major counterparts, including the euro and yen, decreased by 0.07% to 103.79 during early Asian trading, approaching the bottom of the 103.43-104.97 range seen in the previous month.
On Friday, the index dropped by 0.26% following disappointing manufacturing and construction spending data, which also contributed to the decline in Treasury yields. The 10-year benchmark yield fell to 4.178%, a two-week low, and stood at around 4.19% on Monday.
Bias seems to be swinging towards a test of range support, in the lead up to key macro releases this week, as well as Fed Chair Jerome Powell’s annual testimony to Congress, Westpac strategists stated in a client note.
However, markets will need a major shift in data to suggest that range support will be anything other than another buying opportunity, that will keep the dollar index within its current range, they added.
This week’s highlights include manufacturing and services ISM readings on Tuesday, leading up to the highly anticipated monthly payrolls report on Friday.
The dollar decreased by 0.09% to 149.99 yen while traders reviewed cautious remarks from BOJ Governor Kazuo Ueda regarding the central bank’s inflation target.
Meanwhile, the euro remained stable at $1.08425, staying close to its recent highs. Many economists anticipate that the ECB will reduce rates at the June meeting, but they are looking for further insights on the timeline during central bank head Christine Lagarde’s press conference.
