The U.S. dollar was tentative on Tuesday ahead of testimony...

The U.S. dollar was tentative on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted that it might nearly be done with monetary tightening.

The Australian dollar AUD=D3 eased to a more than two-month low of $0.6690 and was last down 0.45% at $0.6702 as the central bank raised its cash rate as expected by 25 basis points to the highest in more than a decade at 3.60%.

But in a dovish move, the RBA changed a reference to further rate "increases", saying instead that "further tightening" would be needed, suggesting that the central bank might be nearing the end of its cycle of increases.

"An initial glance at RBA's statement suggests they are nearing the end of the tightening cycle, and perhaps one step closer to publicly discussing a pause," said Matt Simpson, senior market analyst at City Index.

Elsewhere, the U.S. dollar index =USD , which measures it against six major rivals, was flat at 104.24, having slipped 0.26% overnight. The index is down 0.6% for the month following a 2.6% gain in February.

The euro EUR=EBS was up 0.03% to $1.0681, holding its nearly 0.5% rise overnight. Sterling GBP= was last trading at $1.2037, up 0.13% on the day, while the kiwi NZD=D3 rose 0.08% to $0.620.

The Japanese yen JPY=EBS was mostly flat at 135.93 per dollar ahead of the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday, when the central bank is set to stick to its ultra loose monetary path.

Data on Tuesday showed Japan's real wages fell the most in nearly nine years in January as four-decade-high inflation squeezed the purchasing power of consumers.

Investor attention will firmly be on Powell's testimony before Congress on Tuesday and Wednesday, with the February jobs report due on Friday also keenly awaited.

Kevin Cummins, chief economist at NatWest Markets, said Powell would likely express heightened concern about inflation but would probably stop short of raising expectations for a 50 basis point rate increase on March 22.

After delivering significant rises last year, the Fed raised interest rates by 25 basis points at its past two meetings, but resilient economic data throughout February stoked fears of the central bank going back to bigger steps.

"We suspect he will sound noncommittal for now and take his cues from the looming upcoming key data," said Cummins, who expects the Fed to raise rates by 50 basis points.

Fed funds futures traders are pricing in a 76% probability the Fed will raise rates by 25 basis points at its March meeting. They also expect interest rates to peak at 5.48% in September and still be above 5% at the end of the year. FEDWATCH

OCBC currency strategist Christopher Wong said Powell's testimony will be one of the last instances of Fed officials speaking before the black-out period commences ahead of the FOMC meeting.

"We will be looking for clues on how extended this hiking cycle may be, how high terminal rates may go and whether the magnitude of hike will increase," Wong said, adding he expects the dollar to be volatile between now and the next Fed meeting.

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	Currency bid prices at 0627 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.0682		$1.0684	 -0.01%		 -0.31%	  +1.0693	 +1.0676 
 Dollar/Yen		JPY=EBS	135.8950	   136.0800	-0.11%		 +3.58%	  +136.1650   +135.9000 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.9299		 0.9308	  -0.08%		 +0.58%	  +0.9314	 +0.9297 
 Sterling/Dollar   GBP=D3	 1.2037		 1.2027	  +0.10%		 -0.45%	  +1.2048	 +1.2017 
 Dollar/Canadian   CAD=D3	 1.3617		 1.3612	  +0.03%		 +0.49%	  +1.3618	 +1.3600 
 Aussie/Dollar	 AUD=D3	 0.6702		 0.6732	  -0.44%		 -1.67%	  +0.6748	 +0.6690 
 NZ				NZD=D3	 0.6201		 0.6197	  +0.04%		 -2.36%	  +0.6214	 +0.6190 
 Dollar/Dollar																				   

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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World FX rates	https://tmsnrt.rs/2RBWI5E 

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