By Gina Lee

Investing.com – The dollar was up on Monday morning in Asia, remaining near a two-and-a-half-week high. The U.S. currency received a boost from the U.S. Federal Reserve increasing inflation.

By 12:34 PM ET (4:34 GMT), the index that measures the greenback’s value against other currencies had risen 0.08% to 94.255 (or 94.195 at 04:34 GMT). Near Friday’s 94.302 peak, the index was at its lowest level since Oct. 13.

It was up 0.2% to 114.28

While the pair fell 0.27 to 0.7501, it rose 0.05% towards 0.7168.

This pair dropped 0.01% to 6.4046, and China’s October index was 50.6. Both the and PMIs were published earlier today at 52.4 and 49.2.

This pair fell by 0.11%, to 1.3676.

After Fumio Kimio, the Japanese prime minister and leader of Liberal Democratic Party (Liberal Democratic Party), won a strong majority in Sunday’s parliamentary elections in an unexpected move, the dollar fell to a one-and a half-week high against the yen. This helps to reduce political uncertainty, and Kishida can continue with his plan for increasing stimulus.

“Light yen weakness is the result of lower political uncertainty this morning.” The bigger driver of dollar-yen direction going ahead remains the Fed,” Barclays (LON:) senior FX strategist Shinichiro Kadota told Reuters.

The U.S. personal consumption expenses price index rose 0.3% to September, according to data released Friday. Market expectations of a mid-2020 interest rate increase have been solidified by the Fed’s preferred inflation measurement. This continues a trend of inflation that has not been seen for 30 years.

Following the data’s release, futures on the fed funds rate, which track short-term rate expectations, priced in a 90% chance of quarter-point tightening by June 2022, factoring in another rate increase by December.

It is expected that the Fed will announce it will start asset tapering on Wednesday when it hand down its policy decision. It will deliver its policy decision Tuesday and the next on Thursday.