By Gina Lee
Investing.com – The dollar was flat on Monday morning in Asia, with investors awaiting further guidance on the U.S. monetary policy outlook later in the week.
U.S. Federal Reserve Chairman Jerome Powell is widely expected to discuss monetary policy during the Jackson Hole symposium. The two-day event will open on Thursday.
Some investors were cautiously optimistic that the greenback will see short-term gains if Powell provides clearer guidance on Thursday.
“There could be a short-term bounce in the dollar, especially against the euro,” Junichi Ishikawa, senior foreign exchange strategist at IG Securities, told Reuters.
The euro has been gaining at the dollar’s expense, in the afterglow of the European Union passing a recovery package for its members in July.
Globally, central banks, including the Fed, have rolled out unprecedented measures, such as monetary easing, in response to the economic impact of COVID-19. But the pace of global recovery has seen a setback, with countries such as South Korea battling a resurgence of cases, meaning that additional measures could be necessary.
Ishikawa warned, “in the long term, the dollar will resume its decline because the Fed has to commit to aggressive easing for a very long time.”
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.05% to 93.162 by 9:53 PM ET (2:53 AM GMT).
The ongoing stall in the U.S. Congress over the latest stimulus measures also continues to dampen investor sentiment, with Democrats and Republicans continuing to play the blame game on Sunday.
The USD/JPY pair inched down 0.03% to 105.75. Japanese Prime Minister Shinzo Abe reportedly made a trip to the hospital, a follow up to his visit during the previous week.
The AUD/USD pair edged up 0.15% to 0.7171 and the NZD/USD pair inched up 0.06% to 0.6543.
The USD/CNY pair remained little changed, inching down 0.01% to 6.9170. Investors are keeping a wary eye on U.S.-China relations, with tensions between the two countries continue to simmer. But both countries are looking to reschedule talks to discuss trade and other matters originally due to have taken place on August 15.
The GBP/USD pair inched up 0.04% to 1.3093.