The US Dollar Index remained under the 99.00 level following a conditional hold statement from a non-voting regional Federal Reserve president on Tuesday. According to FX Street, this official tied the current interest rate target range to ongoing evidence that inflation is easing.
Market participants are cautious ahead of a busy economic data schedule on Wednesday and a key speech by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium on Friday. FX Street reported that traders have been squaring positions, which has kept the Dollar Index subdued below the 99 mark.
For Japanese investors, the subdued US Dollar movement comes at a time when currency volatility can impact FX and equity markets, especially with the Bank of Japan maintaining its own monetary policy stance.