Dollar rises against yen, euro steady ahead of inflation report

The dollar rose to more than two-week highs against the yen on Monday as hopes for stimulus measures from China bolstered risk appetite, while the euro remained steady ahead of euro zone inflation data later in the trading day.

Dollar gains against yen, euro steady

USD/JPY was up 0.15% to 102.97, the highest level since March 12.

Market sentiment received a boost after Chinese premier Li Keqiang said Friday the country has policies in place to support economic growth. The remarks eased concerns over recent signs of a slowdown in the world’s second-largest economy.

Data on Friday showing that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January also supported the dollar.

EUR/USD edged up 0.05% to 1.3758, not far from a one-month trough of 1.3704 struck on Friday.

The single currency remained under pressure after European Central Bank officials last week highlighted growing concerns over the threat of deflation in the region.

Data on Friday showing that the annual rate of inflation in Spain declined 0.2% in March fuelled concerns that deflation could threaten the economic recovery in the euro area. A separate report showed that the annual rate of inflation in Germany slowed in March.

The pound was unchanged against the dollar, with GBP/USD trading at 1.6638, while USD/CHF dipped 0.07% to 0.8861.

NZD/USD remained supported at 0.8658, holding just below the two-and-a-half year peaks of 0.8696 struck on Friday.

The Australian dollar backed off Friday’s four month highs, withAUD/USD sliding 0.16% to 0.9232, while USD/CAD was little changed at 1.1062.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was unchanged at 80.35.