The US dollar rebounded from Monday’s lows to edge higher in Tuesday’s Asian session. The greenback fell sharply yesterday after disappointing US personal consumption expenditure data which pointed to weak GDP growth in the first quarter of the year. However, trading is likely to remain cautious ahead of a key speech by Fed Chair Janet Yellen later today.
The dollar climbed to around 113.65 yen in late Asian trading from a low of 113.14 yen on Monday. The Japanese currency remained under pressure today despite better-than-expected consumer spending figures. Household spending in Japan jumped by 1.7% month-on-month in February, beating estimates of 0.5%. Other data were less positive though as unemployment rose 0.1% to 3.3% and retail sales grew by less than expected in February.
Speculation about further fiscal stimulus is keeping downward pressure on the yen as Japan’s parliament meets to approve the budget for fiscal 2016 with some reports saying that Japan’s government might delay a planned sales tax hike for April 2017. The euro and pound both gained against the yen to climb to 127.10 and 161.55 yen respectively.
Crude oil prices continued to drift lower on Tuesday as investors are forecasting another rise in US stockpiles this week. US oil futures slipped to $38.94 a barrel in late Asian session, while Brent crude was back below $40 a barrel.
Gold prices were also weaker today, reversing some of yesterday’s gains as the dollar bounced back from its lows. The yellow metal was last trading at $1217.62 an ounce.
Looking ahead to the rest of the day, it will be relatively quiet for European data and the only major data out of the US will be the latest consumer confidence index. However, all eyes will be on Janet Yellen’s speech at 1620 GMT where she is due to speak on economic outlook and monetary policy in New York.
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