By Gina Lee
Investing.com – The dollar was up on Tuesday morning in Asia, but fell below a one-year high as investors await the latest U.S. jobs report for clues on the U.S. Federal Reserve’s timing to begin asset tapering and hike interest rate hikes.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.17% to 93.942 by 10:28 PM ET (2:28 AM GMT).
The USD/JPY pair edged up 0.18% to 111.06.
The AUD/USD pair edged down 0.18% to 0.7271 and the NZD/USD pair was down 0.24% to 0.6945. The Reserve Bank of Australia will hand down its policy decision later in the day, with the Reserve Bank of New Zealand following a day later. The Reserve Bank of India will hand down its own policy decision on Friday.
The USD/CNY pair was steady at 6.4467, with Chinese markets closed for a holiday. The GBP/USD pair edged down 0.13% to 1.3596.
The dollar has eased back slightly after hitting 94.504, its highest level since September 2020, during the previous week. It had rallied as much as 2.8% since Sep. 3, with investors pricing in the Fed’s asset tapering that could begin as soon as November 2021 and potential interest rate hikes in 2022.
Concerns about the risk of global stagflation to the U.S. debt ceiling debate also boosted the safe-haven greenback.
"There's a lot of bad global news priced into the dollar. The key for markets in the weeks ahead is to sort out the extent of the risk premium already priced in versus how these factors play out," TD Securities global head of FX strategy Mark McCormick (NYSE:MKC) said in a report.
"While the near-term dollar bias leans higher, we're wary about chasing the move at these levels," the report added.
Meanwhile, the U.S. jobs report, including non-farm payrolls, is due on Friday. It is widely expected to show continuing improvement in the labor market. The improvement is also expected to be good enough for the Fed to begin asset tapering within 2021 as planned.