Investing.com - The dollar fell slightly against the yen on Monday after North Korea fired its 9th ballistic missile test since the start of the year, ratcheting up threats to regional peace with Japan, the U.S. and China all holding a stake in tamping down Pyongyang's ambitions to build a nuclear-warhead intercontinental ballistic missile.
USD/JPY fell 0.05% to 111.29 after the early Monday test, while AUD/USD eased 0.04% to 0.7444.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted up 0.20% to 97.33.
Markets in China, the U.,S. and U.K. are shut on Monday. But ECB President Mario Draghi is to testify about the economy and monetary developments before the Economic and Monetary Affairs Committee, in Brussels.
In the week ahead, traders will focus on Friday’s U.S. employment report for further signs of the Fed’s likely rate hike trajectory through the end of the year. In the euro zone, investors will await monthly inflation data to assess the timing of when the ECB may start unwinding its massive asset purchase program.
Last week, the dollar rose against a currency basket on Friday after data showing that U.S. first quarter economic growth was revised higher, while sterling was sharply lower amid jitters over the upcoming UK elections.
The U.S. economy slowed less than initially thought in the first three months of the year. Gross domestic product grew at an annual rate of 1.2% in the three months to March, the Commerce Department said, up from an initial estimate of 0.7%.
It was still the weakest expansion since the first three months of 2016, but economists think growth is likely to rebound sharply in the current quarter.
The dollar had come under pressure earlier in the week after the minutes from the Federal Reserve’s latest meeting tempered some more hawkish rate hike expectations.
Fed officials agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary, though most said a hike was coming soon.
Sterling fell to one-month lows, with GBP/USD after an opinion poll showing that the Labor Party narrowed the gap on the ruling Conservative Party ahead of upcoming elections, adding to political risks surrounding Brexit.
Investors had been confident that Prime Minister Theresa May would secure a strong win in the election, strengthening her hand in Brexit negotiations and allowing her to ignore lawmakers pushing for a hard Brexit.