Dollar holds firm ahead of US durable goods, housing data

The U.S. dollar held firm against major currencies on Tuesday as tension simmered in Russia and traders looked ahead to U.S. data that may determine the timing of further interest rate hikes.

Russian President Vladimir Putin said on Monday he let an aborted mutiny go on as long as it did to avoid bloodshed, a crisis that pushed the dollar to a 15-month high against the rouble.

{{2126|The dodollar index fell 0.22% to 102.510, paring a 0.46% gain on Monday.

The Russian rouble weakened 0.41% versus the dollar at 84.75 after hitting its weakest level since March 2022.

The dollar was softer against the yen after Japanese Finance Minister Shunichi Suzuki said sharp and one-sided moves were observed in the currency market, reiterating comments from the chief currency diplomat on Monday.

Japan intervened to boost the yen last year when it weakened past the 145 per dollar level. The yen strengthened 0.01% to 143.51 per dollar.

U.S. data this week include new orders for durable goods, housing figures, and consumer surveys from The Conference Board and University of Michigan.

Market participants expect the Federal Reserve to raise its funds target rate by 25 basis points in July, but the path beyond is less clear.

“We will have many U.S. indicators, which I think will be mixed, so there will be no strong momentum, at least today,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“Two more rate hikes are not fully priced in the market. If the U.S. economic data comes out on the strong side, then further pricing in for the two rate hikes will push up the dollar,” Yamamoto said.

The euro was up 0.28% to $1.09365 ahead of remarks by European Central Bank (ECB) President Christine Lagarde at the ECB Forum on Central Banking in Sintra, Portugal.

Sterling was last trading at $1.2739, up 0.21% on the day.

The dollar fell 0.40% against the offshore Chinese yuan to $7.2151 after hitting a 7-month high. Investors braced for the possibility of more support measures after China returned from a holiday on Monday.

China’s central bank set its daily yuan fixing stronger than market expectations for a second day in a row on Tuesday. Sources said state-owned banks had been selling dollars in the offshore spot foreign exchange market, increasing speculation authorities were becoming less tolerant of yuan weakness.