News: FOREX-Euro to the fore, yen on backfoot, as policy meetings loom

The yen was on the backfoot on Tuesday as Japan's new central bank chief signalled patience on any monetary tightening while the euro climbed on prospects of a 50 basis point interest rate hike for the common currency bloc at next week's policy meeting.

The dollar also struggled to make meaningful gains in Asia as fresh bank jitters had traders expecting U.S. interest rate cuts before long.

The euro EUR=EBS rose above $1.10 overnight and was still going strong at $1.1056 in Asia. Trade was thinned by holidays in Australia and New Zealand and ahead of central bank meetings in Japan on Friday and the U.S. and Europe next week.

European Central Bank (ECB) board member Isabel Schnabel told Politico that a 50 bp rate hike was not off the table and would depend on data - notably inflation figures due two days before May's meeting.

French ECB policymaker Francois Villeroy de Galhau seemed to have a different view, calling for further hikes to be limited in number and size in an interview with Le Figaro, but markets have focused on the fact that still more hikes are expected.

Futures pricing implies about a 2/3 chance of a 25 bp ECB hike and a 1/3 change of a larger 50 bp rise. 0#ECBWATCH

"It's not fully priced in yet, so if the ECB does go 50 then it will be euro supportive, I think that's what's being reflected in the market," Bank of Singapore currency strategist Moh Siong Sim said.

The euro EURJPY= has also hit an eight-year high at 148.47 yen as new Bank of Japan new governor Kazuo Ueda has been signalling he is not in a hurry to shift policy. This week's BOJ meeting, which concludes on Friday, is his first in charge.

According to Electronic Broking Services data stretching back to the early 2000s, the yen is also at its lowest on the Swiss currency CHFJPY=EBS in two decades at 151.35 per franc.

The yen was steady on the dollar JPY=EBS and last traded at 134.28 per greenback.

News overnight of plunging deposits at First Republic Bank FRC.N in the U.S. served as a reminder that stability risks have not entirely died down and prompted traders to renew expectations that the Fed shifts quickly from hiking to cutting.

Fed funds futures imply about an 88% chance of a hike next week, followed by some 50 bps of cuts by year end. FEDWATCH

The U.S. dollar index =USD dropped 0.4% overnight and hit a 10-day low of 101.19 in early Asia trade.

The Australian dollar AUD=D3 was a shade softer at $0.6676 as traders waited for inflation data due on Wednesday.

The New Zealand dollar NZD=D3 , which has been under pressure since surprisingly soft inflation figures last week, bounced a bit overnight and held at $0.6170 on Tuesday, just above its 200-day moving average.

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	Currency bid prices at 0134 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS																	   

							  $1.1062		 $1.1046	+0.15%		  +0.00%	  +1.1068	 +1.1045 
																								 
 Dollar/Yen		JPY=EBS																	   

							  134.2650		134.2750   -0.01%		  +0.00%	  +134.3550   +133.9600 
																								 
 Euro/Yen		 
				  S>		  148.54		  148.26	 +0.19%		  +0.00%	  +148.6100   +148.0600 
																								 
 Dollar/Swiss	  CHF=EBS																	   

							  0.8865		  0.8876	 -0.12%		  +0.00%	  +0.8878	 +0.8864 
																								 
 Sterling/Dollar   GBP=D3																		

							  1.2501		  1.2483	 +0.16%		  +0.00%	  +1.2507	 +1.2488 
																								 
 Dollar/Canadian   CAD=D3																		

							  1.3527		  1.3541	 -0.11%		  +0.00%	  +1.3541	 +1.3525 
																								 
 Aussie/Dollar	 AUD=D3																		

							  0.6699		  0.6696	 +0.04%		  +0.00%	  +0.6705	 +0.6693 
																								 
 NZ				NZD=D3																		

 Dollar/Dollar				0.6183		  0.6167	 +0.29%		  +0.00%	  +0.6187	 +0.6169 
																								 
																								 
	 
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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