Several Fed officials said on Monday the central bank will likely need to raise interest rates further to bring down still-high inflation, but that the end to its current monetary policy tightening cycle is getting close.
U.S. interest rate expectations have been a key driver of the dollar since the Fed began its tightening cycle last year.
A survey from the New York Federal Reserve showed on Monday waning near-term inflation expectations among Americans, who said last month they were expecting the weakest near-term inflation gains in just over two years.
The dollar/yen pair is particularly sensitive to U.S. yields as interest rates in Japan are anchored near zero.
Elsewhere, the Australian dollar gained 0.16% to $0.6687, while the New Zealand dollar added 0.06% to $0.6216.
Persons:
Sterling, Carol Kong
Organizations:
Federal, Fed, Commonwealth Bank of Australia, New York Federal, Treasury, Australian, New Zealand, Macquarie
Locations:
U.S, Asia, . U.S, Japan, China