By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The dollar index edged back against major rivals in Asian trading hours on Tuesday, with investors on alert for central bank action.
The ICE dollar index DXY -0.02% traded at 81.878, from 81.888 in late North American trading on Monday.
The dollar gained in the North American session on Monday after the release of weaker-than-expected U.S. manufacturing survey data.
However, more weak U.S. data “may mean that the market starts pricing in an increasing likelihood for quantitative easing three, resulting in U.S. dollar weakness,” said strategists at BNP Paribas.
U.S. jobs data is due on Friday. Ahead of that data, however, are some key central bank meetings.
The European Central Bank and the Bank of England are set to announce interest rate decisions on Thursday, while the Reserve Bank of Australia meets on its monetary policy Tuesday.
Economists expected no change from the RBA as the central bank cut its cash rate by 75 basis points over its past two meetings to bring the rate down to 3.5%.
The Australian dollar AUDUSD +0.10% reached $1.0268, from $1.0253 in late trading on Monday.
But the European Central Bank is expected to cut its key rate Thursday.
“With inflation readings falling and the real economy slowing in the euro zone, it seems the macro backdrop supports easing by the ECB,” said strategists at Brown Brothers Harriman.
On Tuesday, the euro EURUSD +0.17% edged up to $1.2592, from $1.2583.
The British pound GBPUSD +0.02% traded at $1.5696, from $1.5690.
“With the Bank of England forecasting a further decline in inflation, the BoE has further scope to pursue further quantitative easing. In fact, we expect them to announce another GBP50 billion of quantitative easing via gilt purchases on Thursday,” said strategists at BNP Paribas.
Against the Japanese currency, the dollar USDJPY +0.26% bought 79.72 yen, up from ÂĄ79.48.
Sarah Turner is MarketWatch's bureau chief in Sydney.
