Forex – Dollar Holds Flat After Japan Data Sets As Attention Turns To Fed

© Reuters. Dollar flat vs yen in Asia – The dollar held steady against the yen in Asia on Tuesday with the start of a two-day Fed meeting ahead and after regional data came in mixed from Tokyo.

changed hands at 108.95, flat, while traded at 0.8096, up 0.05%. traded at 0.7323, up 0.01%.

Japan reported household spending down 2.5% on month, more that the 0.6% decline seen and down 0.1% annually, compared to an increase of 1.6% expected for December. As well, the ticked up to 2.8% from a steady 3.7% seen and rose 3.6%, compared to a gain of 1.8% expected on year.

Earlier, New Zealand reported its for December with a NZ$2.840 billion deficit, narrower than the NZ$3.42 billion deficit seen on year.

Later on Tuesday in Australia, the and are due.

The , which measures the greenback’s strength against a trade-weighted basket of six major curre

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted up 0.34% to 89.17.

Overnight, the dollar rose against a basket of major currencies buoyed by rising bond yields amid comments from Goldman Sachs (NYSE:) suggesting that the Federal Reserve is poised to adopt more hawkish stance on monetary policy at its meeting this week.

Goldman Sachs said it expects the Federal Reserve bank to adopt a slightly hawkish slant in its commentary related to economic conditions and inflation, when the central bank releases its policy statement due Wednesday.

That stoked investor expectations for a more hawkish outlook on US rates, sending yields soaring while boosting the greenback. Markets have priced in three rate hikes this year, the first of which is widely expected in March.

Also supporting the greenback were mostly bullish economic data as the benefit of tax reform – which has triggered a host of companies to issue employee wage hikes and bonuses – was believed to have boosted personal income, spurring a rise in spending.

The Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4% in December after an upwardly revised 0.8% rise in the previous month.

Personal income rose 0.4% in December after rising 0.3% in the previous month, while the savings rates hit a 10-year low, prompting some analysts to warn that a rebound in savings would weigh on consumer spending in the first quarter of 2018.

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