Title: Dollar Down, Yen and Aussie Continue Drop as Fed Policy Decision Looms

Mar 14, 2022 11:15PM ET

By: AnalysisWatch

The dollar weakened in Asia on Tuesday morning, as did the Japanese yen and the Australian dollar. The recent COVID-19 outbreak in China led to lockdowns in some cities, but the main focus is on the US Federal Reserve's March monetary policy decision.

The US dollar index, which tracks the greenback against a basket of other currencies, was down 0.08% at 98.948 at 11:07 PM ET.

The USD/JPY pair rose 0.11% to 118.31 after the Bank of Japan announced its monetary policy decision on Friday.

The AUD/USD pair fell 0.08% to 0.7181. The Reserve Bank of Australia released the minutes of its last meeting, and the NZD/USD pair fell 0.01% to 0.6744.

The USD/CNY pair rose 0.16% to 6.3754. Chinese data released earlier in the day showed that fixed-asset investment rose 12.2% y-o-y in February. Industrial production rose 7.5% y-o-y and retail sales rose 6.7%, while the unemployment rate stood at 5.5%.

The GBP/USD rose 0.20% to 1.3026 as the Bank of England will announce its monetary policy decision on Thursday.

The dollar index was not far from the 99.415 level it reached a week ago, its highest level since May 2020.

The yen has dropped sharply in recent sessions as policy differences between the Fed and the BOJ became more apparent.

Hopes that Ukraine and Russia would reach a negotiated end to the war sparked by the Russian invasion on February 24 also took some of the yen's safe-haven appeal away.

The two countries held the fourth round of talks on Monday, but no new progress was reportedly made. The talks will continue on Tuesday.