By Gina Lee
Investing.com – The dollar was down Wednesday morning in Asia, near its lowest level since early January 2021, as U.S. Federal Reserve officials reiterated all inflation will be transient and the Fed will maintain its accommodative monetary policy current.
The price that tracks the greenback against a basket of other currencies edged down 0.03% to 89.6 at 12:45 p.m. ET (4:45 a.m. GMT).
The pair advanced 0.02% to 108.78. Hitoshi Suzuki, a board member of the Bank of Japan, said earlier today that the central bank should prevent its holdings of exchange-traded funds (ETFs) from increasing as much as possible during calm market times. .
The pair rose 0.57% to 0.7794. Across the Tasman Sea, the pair jumped 1.11% to 0.7307. The, released earlier today, kept the central bank’s interest rate unchanged at 0.25%. The RBNZ also said it would only cut its stimulus measures once its inflation and employment targets are met.
The pair was down 0.23% at 6.3953. The yuan strengthened to 6.3925 per dollar during Tuesday’s Asian session in offshore trading, breaking the 6.40 mark for the first time since mid-2018. The move would have prompted Chinese state-owned banks to buy dollars at around 6.40 yuan later in this session to cool the rally in the onshore yuan.
Amid conflicting reports from Chinese officials in recent days about their attitude to the currency, here we read that 6.40 is not a hard line in the sand, and that against the backdrop of a new downward pressure on the dollar more generally, it will be “allowed” to trade lower, “said Ray Attrill, strategist at the National Australia Bank (OTC :), in a report that reiterates a forecast of 6.35 yuan for a dollar by the end of June 2021.
The pair rose 0.10% to 1.4165.
A slew of US Federal Reserve officials, echoing the sentiments of President Jerome Powell, reiterated that any inflation will be temporary and that the central bank will keep its current accommodative monetary policy unchanged.
“I have yet to see anything that persuades me to change my full support for our accommodative stance,” Chicago Fed Chairman Charles Evans said Tuesday.
“Right now, the policy is right… We have to be patient,” added Mary Daly, president of the San Francisco Fed.
“The belief by Fed officials that this year’s price pressure will be transient suggests that there is no real reason to suspect a significant rollback in monetary policy accommodations in the near term,” he said. said Jane Foley, strategist at Rabobank.
However, Fed Vice Chairman Richard Clarida told policymakers on Tuesday, echoing recent minutes from the last Fed meeting.
“It may well be that … there will come a point in future meetings where we will be at the point where we can start discussing reducing the pace of asset purchases … that was not the theme of the April meeting depend on data flow, ”he added.
Investors are now awaiting data, including the United States, which is due to be released on Friday.
Fusion Media or anyone involved with Fusion Media will not accept any responsibility for loss or damage resulting from reliance on any information, including data, quotes, graphics and buy / sell signals contained in this website. Be fully informed of the risks and costs associated with trading in the financial markets, it is one of the riskiest forms of investing possible.