By Gina Lee
Investing.com – The dollar was up on Wednesday morning in Asia. The Australian dollar minimized losses while the Japanese yen continued its slide, as investors slowly turn to riskier assets and climbing commodity prices continue to drive market movements.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.01% to 98.530 by 12:21 PM ET (4:21 AM GMT).
The USD/JPY pair was up 0.28% to 121.13.
The AUD/USD pair inched down 0.08% to 0.7461 and the NZD/USD pair inched down 0.08% to 0.6957.
The USD/CNY pair inched up 0.03% to 6.3686 and the GBP/USD pair edged up 0.14% to 1.3282.
The Australian dollar hit its highest level since December 2015 versus the yen and has gained 8% in March to date. It hit a four-and-a-half month high in early trade, after gaining 0.95% overnight. The yen fell to as low as 121.4 per dollar, with the greenback gaining 1.1% on the Japanese currency overnight.
The Australian dollar's breaking of resistance at $0.745 was due to gains in equities and commodities, ANZ analysts told Reuters, adding that "global risk sentiment" continues to direct the Australian currency's outlook.
U.S. and Asia Pacific shares rallied on Wednesday, with investors largely shrugging off worries about the economic impact of the war in Ukraine, with commodities excepted. Soaring commodity prices will negatively impact the yen due to Japan’s reliance on imported oil and will widen the country's trade deficit.
"USD-JPY has nowhere to go but up," TD Securities analysts told Reuters, who pointed to the differential between U.S. and Japanese rates and the yen's vulnerability to the ongoing shock in commodities.
U.S. benchmark 10-year yields rose to 2.4026% early in the Asian session on Wednesday. They were still receiving support from U.S. Federal Reserve chair Jerome Powell's speech on Monday, where he signaled hiking interest rates by more than 25 basis points at upcoming policy meetings.
The central bank has already raised its interest rate by 0.5% in its latest policy decision, handed down during the previous week.
"A number of other Fed speakers are jumping on Powell's aggressive hiking bandwagon," ING analysts told Reuters.
Powell will speak at the BIS innovation summit later in the day. European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey are also among the summit’s speakers.
However, rising U.S. yields are having little effect on the dollar, with some investors saying much of the increase is already in the price.
The pound hit its highest level against the dollar in nearly three weeks, with investors' focus on U.K. Chancellor of the Exchequer Rishi Sunak’s “spring statement” on the budget due later in the day. British inflation data, including the consumer and producer price indexes, are also due later in the day.
In cryptocurrencies, bitcoin traded near $42,400, holding on to its overnight gains, and ether was just under $3,000.