Investing.com - The U.S. dollar inched up on Monday in Asia after falling last week following a speech from New York Federal Reserve President John Williams (NYSE:WMB) revived hopes of a large interest rate cut at the Fed’s next policy meeting.
The U.S. dollar index that tracks the greenback against a basket of other currencies inched up 0.1% to 96.875 by 1:01 AM ET (05:01 GMT).
"It's better to take preventative measures than to wait for disaster to unfold," Williams told a central banking conference. "When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress."
The comment revived hopes that the Fed will cut its Fed funds rate by 50 basis points – rather than the more modest 25 basis point consensus view – at the Federal Open Market Committee meeting on July 30-31.
U.S. President Donald Trump said he “likes” Williams’ statement and that he is “100% correct in that the Fed ‘raised’ far too fast & too early. Also must stop with the crazy quantitative tightening.”
On Friday, James Bullard, another member of the U.S. central bank, said he favors lowering interest rates by a quarter point when officials meet later this month.
Bullard added that becoming Fed’s chairman is “something I’d love to do.”
“If I ever got that honor, I would certainly take it,” the St. Louis Fed president told reporters Friday in New York. “I notice the phone hasn’t been ringing off the hook to get that. And obviously it’s something that the stars have to align for that to happen.”
The EUR/USD pair edged down 0.04% to 1.1215. The European Central Bank’s policy meeting will be closely watched as investors wait to see what steps Mario Draghi may take to support the euro area economy.
The USD/JPY pair trade 0.3% higher to 107.96. Japan’s manufacturing data is due on Wednesday.
The GBP/USD pair slipped 0.1% as concerns over the prospect of a no-deal Brexit continue to build. The British pound traded near a 27-month low against the dollar last week before recovering slightly on Friday.
The AUD/USD pair was little changed at 0.7038, while the NZD/USD pair was up 0.2% to 0.6776.