The dollar was up on Wednesday morning in Asia, investors now await cues on monetary policies from the U.S. Federal Reserve Chair’s testimonies to the Congress.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.15% to 104.377 by 11:21 PM ET (3:21 AM GMT).
The USD/JPY pair fell 0.35% to 136.13, having hit 136.71 in early trade, the lowest since October 1998.
The Bank of Japan kept its interest rates ultra-low and vowed to defend its policy of yield curve control (YCC) last week, sending the yen lower.
However, Japanese Finance Minister Shunichi Suzuki said on Tuesday that he was concerned about the sharp yen weakening and would respond to exchange market moves if necessary.
“Dollar/yen is continuing to trade on the Treasury yields, which have been stable but with the 10-year staying above the 3.20% level while the Bank of Japan has done a lot to defend YCC,” Saxo Markets Hong Kong market strategist Redmond Wong told Reuters.”
The AUD/USD pair fell 0.71% to 0.6920, and the NZD/USD pair was down 0.87% to 0.6274. Low commodity prices, such as iron ore, continued to weigh on the Australian dollar.
The USD/CNY pair gained 0.37% to 6.7145, while GBP/USD pair edged down 0.27% to 1.2238.
Fed Chair Jerome Powell will start a two-day testimony to Congress later in the day, with investors looking to see more clues on if the Fed will deliver another interest rate hike of 75 basis points.
Fed Bank of Richmond President Thomas Barkin said the central bank should hike interest rates as fast as it can without causing undue harm to financial markets or the economy.
Elsewhere, European Central Bank chief economist Philip Lane said the ECB will raise interest rates by 25 basis points at its July meeting while the size of its September hike remains to be seen, signaling a possibility of a larger 50 basis points hike.
Aggressive monetary policy from the Fed has sparked concerns of slowing economic growth with Tesla Inc. Chief Executive Officer Elon Musk warning that the U.S. is heading toward a recession.
In cryptocurrencies, Bitcoin was at $20,600.
