The dollar held steady in Asia on Friday on expectations U.S. Federal Reserve Chairman Jerome Powell would stick with his message that the central bank has not entered a prolonged monetary easing cycle.
Powell gives a highly-awaited speech later Friday at a meeting of central bankers in Jackson Hole, but doubts have emerged after two Fed officials said they saw no reason to cut interest rates again without new signs of economic weakness.
In Asian currency markets, the New Zealand dollar jumped after the Pacific nation's central bank chief said he was "pleased" with where interest rates were at, hosing down expectations of more immediate rate cuts after this month's aggressive easing.
Currency markets have in recent months been driven by global central banks' shift to much more accommodative policy settings as economic demand slows and trade disputes intensify.
Expectations that the Fed will cut rates at its next meeting in September are still very high, according to interest rate futures, but the currency market is likely to react if the tone of Powell's comments do not match these dovish expectations.
The dollar was little changed at 106.48 yen on Friday. The dollar fell 0.2% versus the yen on Thursday following slightly weak data on the U.S. manufacturing sector.
For the week, the greenback was on course for a 0.1% gain versus the yen.
The dollar index (DXY) against a basket of six major currencies was little changed at 98.170.
The New Zealand dollar rose 0.4% to $0.6391 and 0.4% to 68.06 yen. Reserve Bank of New Zealand Governor Adrian Orr told Bloomberg TV he can afford to wait on monetary policy after stunning investors earlier this month with a sharp 50-basis-point rate cut.
Source : Reuters