The U.S. dollar remained weak on Thursday after sliding against major peers overnight for the first time this week as investors fretted about the potential for recession in the United States.
The yen garnered support from a decline in Treasury yields amid bets the U.S. Federal Reserve will slow the pace of interest rate hikes but may keep rates high for longer.
The yuan hovered near an almost three-month high after China revealed a loosening of stifling COVID restrictions.
The U.S. dollar index – which gauges the greenback versus six counterparts – ticked up 0.16% to 105.30 early in the Asian session, clawing back a bit of its 0.42% slide overnight, its first decline since Friday.
While investors have been anticipating the Fed will soon slow its tightening pace, recent upbeat U.S. employment, services and factory data have added to investor uncertainty over the policy outlook.
Money markets price 91% odds that the policy-setting Federal Open Market Committee will raise rates by half a point on Dec. 14, with just 9% probability for another 75 basis point increase. Rates are now seen peaking at just below 5% in May.
Fed policy makers will have the benefit of seeing the latest consumer inflation data a day before the decision.