By Zhang Mengying

Investing.com – The dollar was down on Tuesday morning in Asia as investors are keeping an eye on posturing from major central banks to curb inflation.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.34% to 104.35 by 12:52 a.m. ET (0452 GMT).

The USD/JPY pair inched up 0.02% to 135.10, hovering near a 24-year low versus the dollar.

Japanese Finance Minister Shunichi Suzuki said earlier on Tuesday that he was concerned about the recent sharp yen weakening and would appropriately respond to exchange market moves if necessary.

The AUD/USD pair was up 0.32% to 0.6970, and the NZD/USD pair stabilized at 0.6334. The Reserve Bank of Australia (RBA) Governor Philip Lowe reiterated Tuesday that further interest rate hikes likely loom.

“As we chart our way back to 2 to 3% inflation, Australians should be prepared for more interest rate increases,” Lowe warned.

“The level of interest rates is still very low for an economy with low unemployment and that is experiencing high inflation.”

The USD/CNY pair inched down 0.06% to 6.6885, while GBP/USD pair edged up 0.13% to 1.2267. China saw COVID-19 flare-up in cities such as Shenzhen, sparking worries about the second-largest country’s uncertain recovery path.

Major central banks took actions to tame inflation and raise interest rates, adding to investors’ concerns about slowing economic growth.

St. Louis Fed President James Bullard warned that U.S. inflation expectations could “become unmoored without credible Fed action,” while former Treasury Secretary Lawrence Summers suggested that to counter price pressures, the U.S. jobless rate would need to rise above 5% for a sustained period.

In Europe, European Central Bank President Christine Lagarde said that officials intend to hike interest rates in July and September despite growing concerns over financial-market tensions.

U.S. Federal Reserve Chair Jerome Powell will testify to the Senate and the House on Wednesday and Thursday.

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