Dollar Slips, Weighed Down by Unclear Monetary Policy Outlooks By

© Reuters.

By Zhang Mengying – The dollar was down on Tuesday morning in Asia as investors are keeping an eye on posturing from major central banks to curb inflation.

that tracks the greenback against a basket of other currencies fell 0.34% to 104.35 by 12:52 am ET (0452 GMT).

The pair inflated up 0.02% to 135.10, hovering near a 24-year low versus the dollar.

said earlier on Tuesday that he was concerned about the recent sharp yen weakening and would appropriately respond to exchange market moves if necessary.

The pair was up 0.32% to 0.6970, and the pair stabilized to 0.6334. The Reserve Bank of Australia (RBA) Governor Philip Lowe reiterated Tuesday that further interest rate hikes likely to loom.

“As we chart our way back to 2 to 3% inflation, Australians should be prepared for more interest rate increases,” Lowe warned.

“The level of interest rates is still very low unemployment for an economy with low and that is experiencing high inflation.”

The pair inched down 0.06% to 6.6885, while pair edged up 0.13% to 1.2267. China saw COVID-19 flare-up in cities such as Shenzhen, sparking worries about the second-largest country’s uncertain recovery path.

Major central banks took actions to tame inflation and raise interest rates, adding to investors’ concerns about slowing economic growth.

St. Louis Fed President James Bullard warned that while US inflation expectations could “become unmoored credible Fed action” Treasury Secretary Lawrence Summers suggested that to counter price pressures, the former US jobless rate would need to rise above 5% for a sustained period.

In Europe, European Central Bank President Christine Lagarde said that officials intend to hike interest rates in July and September despite growing concerns over financial-market tensions.

US Federal Reserve Chair Jerome Powell will testify to the Senate and the House on Wednesday and Thursday.

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