The dollar stood just off its highest since early November against a handful of peer currencies on Tuesday, raising intervention worries as the yen languished at its lowest level since 1990 following hotter-than-expected U.S. retail sales.

Market focus was also on the Chinese yuan, with a slew of top-tier economic data due out of China later in the Asian morning expected to show the world’s second-largest economy slowed in the first quarter.

In the U.S., retail sales rose 0.7% last month, compared with the 0.3% rise that economists polled by Reuters had forecast. Data for February was also revised higher to show sales rebounding 0.9%, which was the largest gain in just over a year, instead of the previously reported 0.6%.

The latest data has raised more questions about when the Federal Reserve could begin cutting interest rates, following robust employment gains in March and a pick-up in consumer inflation.

Markets are now pricing in a 41% chance of the Fed cutting rates in July, compared with around 50% before the data, according to CME FedWatch tool. The likelihood of the first cut coming in September has bumped up to nearly 46%.

“I just see no chance of a July hike, assuming we’re all looking at the same data,” said Matt Simpson, senior market analyst at City Index. “Add into the mix of safe-haven flows from Middle East headlines and the apparent reduction of Fed cut bets, the U.S. dollar was again the strongest FX major on Monday.” The U.S. dollar index touched 106.27, the highest since Nov. 2, after the data. It last hovered around 106.23.

The Japanese yen languished under the dollar’s continued strength and large interest rate differential between the two countries, breaching 154 to hit a fresh 34-year low against the dollar on Monday.

Traders were on high alert for signs of yen-buying intervention from Japanese authorities. With hedge funds building up their largest bets against the currency in 17 years, a rebound in the yen could trigger a significant rally.

Japanese Finance Minister Shunichi Suzuki said on Tuesday he was closely watching currency moves and will take a “thorough response as needed” after the dollar surged to a fresh 34-year high.

The yen last hovered around 154.29 per dollar, not far from the new resistance level of 155.

Despite verbal warnings, “the test of 155 seems too tempting,” and market forces are likely to drive the currency pair higher, said City Index’s Simpson.

“How it reacts around that level should provide a good indication of whether (Japanese authorities) have thrown in the towel with intervention.”

Elsewhere, the euro brushed $1.06018, the weakest since Nov. 3, as it continued to slump after the European Central Bank last week left the door open to a rate cut in June.

The Australian dollar also hit a fresh low against the greenback on Tuesday, dropping to its lowest since Nov. 14 at $0.6429.

The kiwi fell 0.12% to a new five-month low of $0.593.

The offshore Chinese yuan was mostly unchanged at 7.2620 per dollar ahead of the key economic data releases out of China.

In cryptocurrencies, bitcoin last rose 0.05% to $63,171.00.


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