By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia but remained near a five-month low as the focus remains on U.S. inflation data and a European Central Bank (ECB) policy decision, both due later in the day.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.07% to 12:13 by 90.183 PM ET (4:13 AM GMT).

The USD/JPY pair inched down 0.05% to 109.56.

The AUD/USD pair inched up 0.05% to 0.7733 and the NZD/USD pair inched up 0.06% to 0.7183.

The USD/CNY pair inched down 0.01% to 6.3856. People’s Bank of China governor Yi Gang predicted at the Lujiazui Forum in Shanghai that consumer inflation will stay under 2% in 2021, below the government’s official target of about 3%.

The economy is operating within a reasonable range close to the potential output level, and prices are overall manageable, he added.

The GBP/USD pair inched down 0.04% to 1.4112.

Moves remained small as investors continued to take a wait-and-see approach that also removed some market volatility.

The U.S. inflation data, including May’s consumer price index, is much anticipated after the previous month’s report said that consumer prices increased by the largest margin in 12 years in April.

With forecasts prepare by Investing.com predicting a 0.4% increase, bets are now on that higher price will last longer than anticipated. This also calls the U.S. Federal Reserve’s recent insistence that inflation pressure is temporary into question.

Although the greenback remained bound to a narrow range ahead of the data, benchmark 10-year U.S. Treasury yields have tumbled within the past week, falling from 1.6350% on the past Friday to 1.874% earlier in the Asian session.

"It feels like the balance of risk is tilted to the upside on U.S. CPI versus the consensus, which would favor a sell-off in Treasuries, and thus higher yields and subsequently a stronger dollar… bonds seem overbought," Pepperstone head of research Chris Weston said in a note.

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On the central bank front, investors will be looking out for any signs that the ECB will start tapering its asset purchases in its policy decision. Although the central bank is widely expected to keep the status quo on its policy, any signs of tapering could impact the euro’s movement.

The single currency rose to a one-week high at $1.2218 on Wednesday before finishing little changed and remained near the $1.2178 mark as the Asian session opened.

Investors also await the Fed’s policy decision, due to be handed down the following week.

In the cryptocurrency space, bitcoin held onto gains from its biggest rally in four months. It was last trading at the $37,097.02 mark after jumping nearly 12%on Wednesday.

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