Dollar sluggish as traders bide time before Fed meeting; kiwi jumps By Reuters
By Kevin Buckland
TOKYO (Reuters) – The dollar drifted near the middle of its range of the past month versus major peers on Thursday, as traders looked to next week’s Federal Reserve policy meeting for indications on how soon the U.S central bank will start to taper stimulus.
New Zealand’s dollar rose after an acceleration in the pace of economic growth. It is now expected that the central bank would raise interest rates, despite the recent coronavirus epidemic.
The was 0.23% higher at $0.7125, after briefly surging as much as 0.47%.
We have not seen any changes in the, which compares six currencies, to 92.483 on Wednesday.
At the beginning of this week it was at 92.887. It dropped to 92.321 by Tuesday, after the release of a softer than expected inflation report. On Sept. 3, after disappointing payroll data, it hit a low of 91.941.
“We’re waiting for the FOMC next week – that remains the key focus,” said Shinichiro Kadota, senior FX strategist at Barclays (LON:) in Tokyo. “I do not think that the dollar will go too far (before that).
The Federal Open Market Committee’s two-day policy meeting that ended Sept. 22 and included a number of speakers should help to clarify the prospects for tapering or eventual rate rises.
Tapering is a common way to lift the dollar because it indicates that the Fed will be tightening its monetary policy.
The central bank will also be purchasing fewer assets in debt, thereby decreasing the amount of dollars that are in circulation and increasing currency value.
It bought 109.33 Japanese yen. This is little different from Wednesday’s low of 109.110, which was six weeks ago.
Euro was steady at $1.1816. It consolidated between its previous month highs and lows of $1.1909, $1.17705 and $1.1909.
The yen’s strong performance on Wednesday may have been helped by foreign flows into Japanese stocks with the reaching a multi-decade high this week, as well as covering of short positions, Kadota said.
Elsewhere, Norway’s crown rose slightly to 8.5710 per dollar, edging back toward the more than two-month high of 8.5598 reached overnight amid a rally in oil prices.
Against the euro, the crown touched the strongest since June 25 at 10.1119.
” “This is one of our preferred exposures for a rising crude oil price and we are seeing a solid bearish tendency here,” Chris Weston from Pepperstone, a broker in Melbourne wrote to clients.
“If and WTI crude are headed for their respective double tops then EURNOK is going one way in my view.”
At $0.7335, the Australian dollar was unchanged.
Although the country’s unemployment rate dropped unexpectedly to 4.5%, the statistics bureau stated that the drop was due to a decrease in participation rather than an increase in labour market.
Currency bid prices at 0140 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
$1.1816 $1.1816 +0.02% -3.28% +1.1820 +1.1816
109.3250 109.3500 -0.02% +5.84% +109.4550 +109.3200
129.18 129.20 -0.02% +1.78% +129.3400 +129.1900
0.9199 0.9197 +0.03% +3.98% +0.9201 +0.9196
1.3843 1.3843 +0.01% +1.34% +1.3852 +1.3843
1.2630 1.2624 +0.06% -0.81% +1.2632 +1.2618
0.7338 0.7334 +0.07% -4.60% +0.7345 +0.7335
Dollar/Dollar 0.7126 0.7110 +0.27% -0.72% +0.7140 +0.7109
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