The dollar was broadly steady on Monday as data showing a decline in U.S. inflation boosted bets the U.S. central bank could cut interest rates in June, while the yen hovered near 152 to the dollar, adding to traders' concerns about possible government intervention.
The Commerce Department's Bureau of Economic Analysis said Friday that the personal consumption expenditures price index rose 0.3 percent in February, compared with economists' expectations in a Reuters poll for a 0.4 percent increase.
The report also showed consumer spending rose in February by the most in just over a year, underscoring the strength of the economy.
Most markets around the world were closed on Friday, and European markets were closed on Monday.
Federal Reserve Chairman Jerome Powell said on Friday that the latest U.S. inflation data was in line with what we would like to see, in comments that echoed what he said after the bank's monetary policy meeting last month.
The CME Group's FedWatch service showed that markets now see a 68.5 percent chance of a rate cut by the U.S. central bank in June, up from 57 percent at the end of last week.
Traders expect cuts of 75 basis points this year.
Investors will now focus on the March employment data, due out later, and if the labor market data improves, it is expected that the US Federal Reserve will start its monetary easing cycle starting in June.
The euro fell 0.03 percent to $1.0787, hovering near a more than one-month low of $1.0769 touched last week.
The pound was last trading at $1.2637, up 0.12 percent on the day.
The dollar index, which measures the performance of the US currency against a basket of six major currencies, rose by about 0.057 percent to 104.54 points, near the highest level in six weeks at 104.73 points that it touched last week.
All eyes in the currency market turned to the yen, as its fall towards levels last seen in 1990 increased the chances of intervention by Japanese authorities.
The yen touched a 34-year low against the dollar at 151.975 on Wednesday, and was last at 151.395 per dollar on Monday.
Japan intervened in the currency market in September 2022, and again in October of the same year, as the yen fell to a 32-year low of 152 to the dollar.
It is difficult to predict Japan's direction regarding the yen now that the country's fiscal year is over, which means the Bank of Japan does not need to worry about the impact of a sudden yen move on balance sheets.
Finance Minister Shunichi Suzuki said Monday he would not rule out options against excessive currency movements and would respond with appropriate measures, reiterating his warning against rapid moves in the yen.
The Chinese yuan fell on Monday under pressure from the dollar, even as the latest Chinese data indicated that the economic recovery is gaining momentum and that the central bank's efforts to stabilize the currency are continuing.
The yuan opened at 7.2227 per dollar in spot trading and was last quoted at 7.2292.
The Chinese currency recorded 7.2508 to the dollar in offshore trading.
The Australian dollar rose 0.08 percent to $0.6521, while the New Zealand dollar was little changed at $0.59805.
In the cryptocurrency market, Bitcoin rose 1.0 percent in the latest trading to $70,425.88.
Ethereum rose 3.0 percent to $3,600.
