Dollar weakens in early trade

6 Mar 2023 , 10:10 AM

On Monday, the U.S. dollar had a shaky start to the week as investors awaited Federal Reserve Chair Jerome Powell’s testimony and anticipated the release of the February employment data, which will probably determine how hawkish the U.S. central bank will be.

The dollar index, which compares the value of the dollar to six other major currencies, was down 0.057% at 104.560, although it was still very close to the seven-week high of 105.36 it reached last week. The index had its first weekly decline last week since January.

The Fed has increased interest rates by 25 basis points in its most recent two meetings after delivering hefty boosts last year, but a flood of strong economic data has fuelled market concerns that the central bank may resume its aggressive approach.

The probability that the Fed will increase interest rates by 25 basis points at its meeting on March 22 is 72%, according to Reuters.

The February employment data, which is due out on Friday, and Fed Chair Jerome Powell’s hearing before Congress on Tuesday and Wednesday will be the main topics of discussion.

The euro, which had gained 0.8% the previous week, was down 0.02% at $1.0632 at the time.

Sterling was last trading at $1.203, down 0.08% on the day, while the Japanese yen gained 0.01% to 135.85 per dollar.

The onshore yuan last traded at 6.9067 per dollar in the spot market, having started at 6.9072 per dollar. As its annual session of the National People’s Congress got underway on Sunday, China set a modest goal for 2023 economic growth of about 5%.

Bitcoin, a cryptocurrency, increased 0.95% to $22,455.94 after declining 5% on Friday. At $1,567.30, Ethereum was 0.51% higher.

The kiwi weakened 0.10% to $0.622, while the Australian dollar dropped 0.19% to $0.676.

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