Investing.com - The dollar eased against the yen on Monday and the Aussie dipped as retail sales data weighed with analysts keeping an eye on political risk elements with President Donald Trump's administration on the backfoot over its immigration and other policies.
USD/JPY fell 0.20% to 112.43, while AUD/USD dipped 0.18% to 0.7666.
The market is caught between a situation of "Trump-flation", that is higher yields and stronger dollar, or "Donald Doubt," which sees a softer dollar and lower yields due to protectionism and dollar jaw-boning, said Mizuho Bank's Vishnu Varathan in a Monday note.
In Japan, average cash earnings inched up 0.1% year-on-year in December, well below the 0.4% gain expected. On an annual inflation-adjusted basis, wages dropped in December for the first time in a year as a rise in the cost of living outpaced nominal pay hikes. The labor ministry said adjusted real wages dropped 0.4% in December from a year earlier, following a revised flat reading in November.
In Australia, retail sales dipped 0.1% in December month-on-month, much weaker than the 0.3% increase seen. In China, the Caixin Services PMI stayed in expansion at 53.1, but missed the expected 53.6 level and was below the previous month figure of 53.4.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was flat at 99.69.
In the week ahead comes monthly trade figures in the U.S. in an otherwise thin week for economic data.
Last week, the dollar slid on Friday as the latest U.S. employment report showed that jobs growth beat expectations, but wage growth remained tepid, which will likely prompt the Federal Reserve to adopt a more cautious approach on raising interest rates this year.
The Labor Department said the U.S. economy added 227,000 jobs in January from the prior month, while the unemployment rate ticked up to 4.8% from 4.7% in December, as more Americans joined the workforce.
Economists had forecast nonfarm payrolls rising by 175,000 last month.
But average hourly earnings rose 2.5% in January from a year earlier, slowing from 2.8% in December.
The slowdown in wage growth prompted speculation that the Fed will avoid hiking interest rates too quickly.
In its latest monetary policy statement on Wednesday the Fed stuck to its view that the economy is strengthening, but gave no clear signal on the timing of its next rate hike as officials wait to assess the possible economic impact of the Trump administration’s protectionist policies and recent remarks about currencies.
The greenback has been hard hit by concerns that a preference for a weak dollar could have a prominent role to play in Trump's 'America First' agenda.