By Gina Lee

Investing.com – The dollar was up on Monday morning in Asia, with the U.S. Federal Reserve’s latest policy decision due later in the week.

That tracks the greenback relative to a basket currency fell 0.1% to 95.735 at 12:11 ET (5:11 GMT)

It was up 0.2% at 113.94.

In the end, it fell by 0.07% at 0.7178. Then again, 0.02 percent was lost at 0.6719.

Both the pairs fell by 0.10% to 6.3326 and climbed by 0.01% each to 1.3555.

“The Fed has taken the markets under its wing. Frederic Neumann from HSBC was the co-head for Asian economics research. He said that this week the Fed will tug and yank once more.

The currency market’s main driver is how fast central banks increase interest rates.

“What will prompt investors to scurry about will be the guidance Chair Powell might give at his press conference about quantitative tightening later in 2022,” said Neumann’s note, which added that he does not expect a policy change.

Investors are beginning to speculate about the possibility that the Fed might raise interest rates for only the second time since the start of 2020.

“We consider the higher risk is the Fed’s statement portrays an urgency to act soon, likely in March 2022, in the face of very high inflation. The urgency could culminate in a decision to abruptly stop quantitative easing (QE) by mid-February,” Commonwealth Bank of Australia analysts said in a note.

Analysts predicted that a bullish statement, and/or an earlier end to QE could encourage markets to price the risk of a 50bp rate increase in March,” they added.

Investors also await the policy decision, due to be handed down just ahead of the Fed’s. On Tuesday, Australia released its consumer price index for Asia Pacific. This will help the Reserve Bank of Australia to determine its policy position in its February decision.

The bitcoin price was $36,026, down 10% from Friday’s low and falling to $34,000 on Saturday. Institutional investors’ increased exposure to cryptocurrencies means that their moves are more closely correlated with other risk assets, some investors warned.