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Forex - Dollar gains in Asia after overnight lull, Aussie down

Published 02/20/2017, 10:24 PM
Updated 02/20/2017, 10:25 PM
© Reuters.  Aussie down

© Reuters. Aussie down

Investing.com - The dollar gained in Asia on Tuesday following think trade because of a holiday overnight in the U.S. and the Aussie fell despite a fairly strong signal from the central bank that policy is on a neutral to higher rate footing.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.28% to 101.20. AUD/USD traded at 0.7670, down 0.23%, while USD/JPY changed hands at 113.69, up 0.52%.

The Reserve Bank of Australia was mildly upbeat on the economy in its February minutes released Tuesday, affirming the scope for more rate cuts is slim to none fromt he current record low of 1.5%.

Overnight, the dollar edged lower against a basket of the other major currencies on Monday, in thin trade with U.S. markets closed for a holiday, while sterling pushed higher, climbing around half a cent against the dollar.

Investor sentiment remained cautious as hopes for changes to fiscal, tax and regulatory policy under the Trump administration have so far failed to materialize. A solo presidential press conference on Thursday added to doubts over how effective the administration will be in enacting its economic agenda.

Concerns over a lack of clarity on the Trump’s administration’s policies have weighed on the dollar, despite recent upbeat economic data and a brighter outlook for interest rate hikes this year.

In Japan, data overnight showed that export growth slowed in January, at a time of growing concerns over the protectionist trade stance of President Trump. The euro was little changed and the single currency found some support as fears eased that the French left could unite behind one candidate in the upcoming presidential elections.

This possible alliance could increase the chances of anti-European Union Marine Le Pen winning the presidency in the second-round runoff.

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