SYDNEY - The dollar made a steady start to the week on Monday, but was kept below Friday peaks as currency traders seek a path between markets, volatile interest rate projections and central bankers vowing to keep rates low even as inflation surges.
The Federal Reserve's insistence that consumer price growth will be patient with interest rate hikes will cause U.S. consumer price growth to rise at 5.8% in the next week.
In early Asia trade, the dollar was marginally higher against the yen and slumped from a one-week low to 113.49 yen.
The dollar remained $1.15135 on the euro after briefly touching a 15 month top of $1.15135 in the aftermath of strong U.S. labour data on Friday.
When the Bank of England surprised traders by holding rates steady last week, sterling fell to a five week low of $1.3425 on Friday before bouncing to hold at $1.3487 on Monday.
The Bank of England's surprise resulted in a sharp reversal late last week as stocks were moving higher through the maelstrom in bond markets, while stocks have meandered higher through the maelstrom in bond markets.
Jason Wong, a strategist at the Bank of New Zealand in Wellington, said the central banks have changed a lot of markets, pumping up the equity market and pumping up the bond market.
He said that the market seemingly is in a holding pattern but with risks building up, especially in China where a slowing economy brings global implications.
The Aussie coined just below $0.74 and the New Zealand dollar around $7109, as the risk-sensitive Australian and New Zealand dollars struggled to make much headway in early trade.
AUD USD risks are skewed to the downside this week, said Kim Mundy, an analyst at the Commonwealth Bank of Australia, especially if U.S. inflation data is strong or if Australian employment data on Thursday are particularly weak.
She said it could be possible to make a rise towards $0.7300.
In weekend data, Chinese exports were unexpectedly strong, but imports unexpectedly soft, another indicator of underwhelming demand, especially as China tightens movement restrictions to keep a lid on COVID-19.
The Communist Party begins a meeting on Monday which is expected to pass a resolution in praise of President Xi Jinping and leave the groundwork for a third term of his leadership.
There is a possibility that Chinese producer and consumer price data will be up on Wednesday due to annual producer price growth surging to 12%, as traders are looking ahead to Chinese producer and consumer price data due on Wednesday.
The Chinese yuan was weaker in early trade at 6.3951 per dollar. The U.S. dollar index was flat at 94.225, which is roughly the top half of the range it has traded for a little more than a month.