Dollar Up, Some Recession Fears Ease

The dollar was up on Friday morning in Asia, but moves were small as some recession fears eased on optimistic speeches from U.S. Federal Reserve governors.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.01% to 107.14 by 12:55 AM ET (4:55 AM GMT).

The USD/JPY pair fell 0.32% to 135.54. Japanese former Prime Minister Shinzo Abe was shot on Friday while campaigning in the city of Nara.

The AUD/USD pair eased 0.21% to 0.6823 and the NZD/USD pair inched down 0.06% to 0.6171.

The USD/CNY pair inched up 0.07% to 6.7059, while the GBP/USD pair inched down 0.06% to 1.2014.

The Fed governors Christopher Waller and St. Louis Fed President James Bullard backed on Thursday the need for restrictive policy to bring down soaring prices but suggested that the U.S. can still avert a recession.

Waller suggested the Fed would likely attempt to tackle inflation with a 75-basis-point interest rate hike in July and a 50-basis-point hike in September.

Boosting market sentiment, U.S. President Joe Biden will discuss possible U.S. tariffs on Chinese goods in a meeting with advisers later in the day.

U.S. initial jobless claims rose to 235,000 last week, suggesting a cooling demand for labor, as the U.S. Federal Reserve delivers tightening monetary policies.

“How the market will react to deviations from this expectation is debatable,” ING’s Robert Carnell and Iris Pang said in a client note.

“You could argue that a stronger figure will mean the Fed has more work to do, and so raises the prospects of a harder landing. But sometimes the market reaction is more simplistic than you might imagine.”