Dollar steady as sticky inflation dents rate cut expectations
inflation remained sticky cast doubts on when the Federal Reserve would start its easing cycle, while the yen remained rooted near the psychologically key 150 per dollar level.
The yen has hovered around 150 level in the last few days, prompting officials to comment on the currency moves and keeping markets on alert to a possible intervention by Japanese authorities.
In early trade on Monday, the yen strengthened 0.20% to 149.94 per dollar but remains down 6% for the year, while against the euro yen hovered around three-month lows of 161.925.
Ministry of Finance officials «took the first step onto the intervention escalation ladder by warning against rapid moves and threatening action even outside of its time zone,» said Marc Chandler, chief market strategist at Bannockburn Global Forex.
Chandler said there appears little on the charts to deter a test to last year's low of 152 per dollar level.
U.S. markets are closed on Monday for the Presidents' Day holiday, with volumes likely to be low through the day.
The dollar index, which measures the U.S. currency against six major rivals, started the week down 0.058% at 104.14 after clocking five straight weeks of gains. The index is up 3% this year.
Data last week showed both U.S. producer prices and consumer prices increased more than expected in January, with the apparent stickiness in inflation raising the prospects of a delayed start to the Fed's rate cuts.
Traders are now betting that June would be the starting point of the easing cycle compared with March at
