Zhang Mengying

Investing.com – The dollar was down on Monday morning in Asia as the economic outlook remained uncertain.

By 12:56 ET (4:56 GMT), the index that measures the greenback relative to other currencies dropped 0.2% to 104.40 (or 0.29%). The U.S. market will close Monday due to a holiday.

It fell by 0.03%, to 134.93. The hawkish international peers kept their monetary policies ultra-loose, which sent the yen further down.

“The market was gearing up for a BOJ capitulation (but) got exactly the opposite,” sending the yen tumbling, National Australia Bank (OTC:) senior foreign-exchange strategist Rodrigo Catril said in a note.

Both the pair saw a 0.44% increase to 0.6960 and a 0.36% jump to 0.6327.

This pair dropped 0.63% at 6.6743. The pair edged up by 0.11% at 1.2238.

Last week, major central banks increased interest rates and tightened their monetary policy. Last Wednesday’s decision to increase interest rates by 75bps, the largest since 1994, was made despite increasing risks of recession. Surprisingly though, they also raised interest rates by 50bps on Thursday and then increased them to 1.25% that day.

Jerome Powell, Fed Chair will be testifying before both the Senate and House Wednesday and Thursday. The Fed vowed last week that its commitment to tame inflation was “unconditional” while Fed Governor Christopher Waller said on Saturday that he would support another hike of 75 basis points in July.

He said that he had been considering raising some tariffs against China, as well as a possible suspension of the federal gas tax in an effort to combat inflation.