The yen gained further in Asia on Monday led by safe-haven buying as investors geared up for a busy week of central bank policy reviews and studied polls for a possible U.K. split from the European Union and studied data from China that pointed to solid retail sales.
USD/JPY changed hands at 106.08, down 0.86%, while EUR/USD traded at 1.1242, down 0.09%. GBP/USD held at 1.4186, down 0.48%.
In China, fixed asset investment in May rose 9.6%, below the 10.5% gain expected year-on-year. As well, industrial production for May seen gained 6.0%, a tad better than the 5.9% seen year-on-year and retail sales jumped 10%, but still below the 10.1% year-on- year expected.
Markets in Australia are shut for a holiday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.14% to 94.76.
Investors will turn their attention to Wednesday’s monetary policy announcement by the Fed for clues on the future direction of U.S. interest rates, as well as monetary policy meetings in Japan, Switzerland and the U.K.
Also ahead, Britain's June 23 referendum on whether to remain in the European Union will weigh on the pound and euro.
Last week, the dollar ended the week sharply higher against the other major currencies on Friday despite diminished expectations for a summer rate hike by the Federal Reserve.
Markets have pushed back expectations on the timing of the next rate hike by the U.S. central bank after the dismal employment report for May, which showed that the economy added just 38,000 jobs last month, the smallest increase since September 2010.
The CME Group's (NASDAQ:CME) Fed Watch tool indicated on Friday that there is a 1.9% chance the FOMC will raise rates in June. The probability of at least one rate hike in 2016 stood at 58.8%.
A speech by Fed Chair Janet Yellen on Monday indicated that interest rates won’t rise until uncertainty over the economic outlook is resolved.Yellen said she expects the economic recovery to continue but gave no indications on the timing of a next rate increase.
The Fed raised interest rates for the first time in almost a decade in December.