Investing.com - The dollar was lower against the yen and the euro on Monday amid ongoing uncertainty over the timing of a possible reduction in Federal Reserve stimulus, while disappointing Chinese manufacturing data also weighed on sentiment.
USD/JPY hit session lows of 102.65, down from Friday’s five year highs of 103.91, and was last down 0.45% to 102.74.
The pair was likely to find support at 102.14, the low of December 11 and resistance at 103.28, the session high.
Investors were turning their attention to the outcome of the Fed’s upcoming policy meeting on Wednesday, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
Recent signs of improvement in the labor market and last week’s agreement on a two-year U.S. budget deal were seen as removing obstacles to the winding back of monetary stimulus.
But with the inflation outlook remaining subdued the Fed may prefer to hold off on tapering stimulus measures until it sees more indications that the recovery is self-sustaining.
The yen received an additional boost after data on Monday showed that the preliminary reading of China’s HSBC manufacturing index ticked down to a three month low of 50.5 in December from a final reading of 50.8 in November.
Economists had expected the index to rise to 51.0.
The euro edged higher against the dollar, with EUR/USD easing up 0.11% to 1.3756. The euro’s gains were held in check ahead of euro zone data on private sector activity later in the day.
Elsewhere, the Australian dollar slipped lower against the U.S. dollar following the Chinese data, with AUD/USD down 0.16% to 0.8952, holding just above Friday’s three month lows of 0.8908.
USD/JPY hit session lows of 102.65, down from Friday’s five year highs of 103.91, and was last down 0.45% to 102.74.
The pair was likely to find support at 102.14, the low of December 11 and resistance at 103.28, the session high.
Investors were turning their attention to the outcome of the Fed’s upcoming policy meeting on Wednesday, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
Recent signs of improvement in the labor market and last week’s agreement on a two-year U.S. budget deal were seen as removing obstacles to the winding back of monetary stimulus.
But with the inflation outlook remaining subdued the Fed may prefer to hold off on tapering stimulus measures until it sees more indications that the recovery is self-sustaining.
The yen received an additional boost after data on Monday showed that the preliminary reading of China’s HSBC manufacturing index ticked down to a three month low of 50.5 in December from a final reading of 50.8 in November.
Economists had expected the index to rise to 51.0.
The euro edged higher against the dollar, with EUR/USD easing up 0.11% to 1.3756. The euro’s gains were held in check ahead of euro zone data on private sector activity later in the day.
Elsewhere, the Australian dollar slipped lower against the U.S. dollar following the Chinese data, with AUD/USD down 0.16% to 0.8952, holding just above Friday’s three month lows of 0.8908.