SINGAPORE- The dollar eased against the euro and yen in Asian trade Tuesday as investors cautiously await US Federal Reserve chief Janet Yellen’s inaugural testimony to Congress.
The euro rose to $1.3667 in Singapore mid-morning trade from 1.3642 in New York late Monday.
The dollar also eased to 102.15 Japanese yen from 102.18 yen. The euro bought 139.64 yen from 139.46 yen.
Japanese financial markets are closed Tuesday for a public holiday.
French bank Credit Agricole said markets were “taking on the appearance of grounding to a halt” ahead of Yellen’s first semi-annual testimony on the state of the US economy and monetary policy to Congress later Tuesday.
Yellen, who succeeded Ben Bernanke on February 1, appears at a similar hearing in the Senate on Thursday.
Credit Agricole said investors would be keen to see if she maintains a dovish bias on the drawdown of its massive stimulus, against the backdrop of a more hawkish policy-making committee in the Federal Reserve.
“While we do not expect any major deviations from the Fed’s current outlook, her interpretation of the recent softening in US data will be an important driver for markets,” it said.
“Against this backdrop, the extent she views the recent soft patch in data as a function of weather-related effects (and other seasonal distortions) could support policy normalization,” it said.
This in turn would reverse gains in US treasury bond prices and provide a boost to the US dollar, it said.
A disappointing US jobs report for January released last week has sparked concerns of weakness in the world’s biggest economy, coming after dismal numbers in December.