Dollar steady above 2-month low vs yen, U.S. tax plan in focus

Singapore (Nov 28)  The dollar held steady versus the yen on Tuesday and held above a two-month low, with the near-term focus on a possible Senate vote on a U.S. tax plan later in the week.

Moves among major currencies were subdued, with market participants also waiting for a confirmation hearing on Tuesday for Federal Reserve chair nominee Jerome Powell, hoping for further clues on the outlook for the Fed's monetary policy.

In remarks prepared for the hearing released by the Fed on Monday, Powell defended the U.S. central bank's use of broad crisis-fighting powers. Regarding the Fed's current monetary policy, Powell said in the prepared remarks: "We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink".

The dollar held steady at 111.14 yen . On Monday, the dollar had set a two-month low of 110.85 yen, as investors were spooked by Japanese media reports saying that North Korea may be preparing for another missile launch.

Worries about potential delays in the implementation of U.S. tax cuts and the possibility of reform measures being weakened have weighed on the greenback in recent weeks.

At the same time, the yen has been supported as risk sentiment has faltered, partly due to weakness in Chinese equities in recent trading sessions.

Reuters