USDJPY: The foreign exchange market is quiet, the USD is stable Most Asian currencies stayed narrow on Wednesday, while the dollar steadied near a six-week high as markets awaited further signals on when the Federal Reserve might start cutting interest rates.
The Australian dollar fell 0.1%, even as January PMI data showed some improvement in manufacturing and services activity. The Aussie, often seen as an indicator of broader risk appetite for Asian markets, is also trading near a seven-week low.
USD steadies near 6-week high with econ. data, Fed meeting underway
The dollar index and dollar index futures both fell 0.1% in Asian trading after rising to their highest since early December in the previous session.
The greenback marked a strong start to 2024 as strong inflation and labor market data showed traders had largely tempered expectations for an early Fed rate cut.
This perception has been exacerbated by a series of hawkish comments from Fed officials over the past week.
The focus now turns to fourth-quarter gross domestic product data, due on Thursday, and PCE price index data - the Fed's preferred inflation gauge - due on Friday. Any sign of recovery in economic growth and inflation gives the Fed more incentive to keep interest rates higher for longer.
The readings also come just days before the Fed's first meeting of 2024, where the bank is widely expected to maintain interest rates at a 23-year high.
But the Fed is still expected to start cutting interest rates this year, which will keep traders watching for any such signals from the meeting.
