Investing.com - The yen showed a touch of strength in early Asia on Monday ahead of core machinery orders as the Forex market gears up for what key central bank policy reviews and a possible formal announcement from Britain on plans to leave the European Union.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 101.38. On March 10 it touched 101.17, its lowest since February 28, amid disappointment that wages in the U.S. were only growing gradually.
In Japan, core machinery orders for January are due with a 3.3% fall seen year-on-year and a 0.5% gain expected month-on-month. USD/JPY was last quoted at 114.79, down 0.01%.
AUD/USD was last quoted at 0.7543, up 0.01%. GBP/USD starts what could be a momentous week off at 1.2165, down 0.04%.
Global financial markets will be busy with central bank meetings in the week ahead, with policy decisions due in the U.S., Japan, the U.K and Switzerland. Investors will also keep an eye out for headlines coming out of a two-day meeting of G20 central bankers and finance ministers in Germany for further hints on the strength of the global economy and the future direction of monetary policy.
Last week, The U.S. dollar retreated against a basket of the other major currencies on Friday, after the latest U.S. employment report showed that jobs growth beat expectations, but wage growth remained tepid.
The U.S. economy added 235,000 jobs in February from the prior month, as the construction sector recorded its largest gain in nearly 10 years due to unseasonably warm weather, the Labor Department said Friday.
The unemployment rate ticked down to 4.7% from 4.8% in January, even as more people rushed into the labor market.
However, average hourly earnings rose just 0.2% in February from a year earlier, below expectations for a 0.3% rise. The small gain lifted the year-on-year increase in earnings to 2.8%, disappointing some investors.
U.S. short-term interest rate futures were little changed following the employment report, according to Investing.com’s Fed Rate Monitor Tool, underscoring the likelihood that the U.S. central bank will raise rates next week and two more times in 2017.
The euro jumped late on Friday, after a report surfaced that the European Central Bank had discussed the possibility of introducing a rate hike before the end of its quantitative easing program.
The report came fresh off the heels of a somewhat hawkish comments from ECB President Mario Draghi at the bank’s post-policy meeting press conference on Thursday. Mr. Draghi said “there is no longer that sense of urgency” for the central bank to use ultra-loose monetary policy to achieve its mandates.
U.K. Prime Minister Theresa May confirmed during a press conference in Brussels that Britain would start exit negotiations with the European Union by the end of this month.