- Dollar adds modest gains after FOMC, before U.S. payrolls
- Euro supported by in-line factory data across the euro zone
- Sterling dips as BOE holds rates, cites risk from Brexit
- Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, changes dateline; previous LONDON)
The dollar gained against most currencies on Thursday as traders pared their bets of an interest rate cut from the Federal Reserve following Fed Chairman Jerome Powell's comment about U.S. inflation.
The pound slipped after the Bank of England lifted its growth forecasts but warned that Brexit continued to cloud the outlook for monetary policy.
Trading volume picked up as some European markets reopened after closing for May Day on Wednesday. Chinese and Japanese markets will remain closed for domestic holidays the rest of the week.
The greenback proved resilient since Powell said at a news conference on Wednesday that the factors dragging on inflation might be "transitory" and he saw no case for a rate move in either direction.
"That took some of the air out of the rate-cut talk," said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California. "Still the market is biased toward a rate cut as the Fed's next move."
Interest rate futures implied traders see about a 53% chance the Fed would lower key lending rates at year-end, down from 61% late on Wednesday, according to CME Group's FedWatch program. FFZ9 FFF0
At 10:04 a.m. (1404 GMT), an index that tracks the greenback against the euro, yen, sterling and three other currencies =USD was up 0.174% at 97.784.
The greenback erased initial losses against the euro, which rose earlier after German retail sales contracted by less than expected while PMI surveys from Germany to Spain were broadly within expectations.
The single currency EUR=EBS was 0.12% lower at $1.1182 and little changed at 124.74 yen.
Meanwhile, sterling retreated from a two-week high against the dollar as the BOE's decision to leave rates unchanged at 0.75% reinforced the view that UK policymakers are in no hurry to raise rates amid concerns about ongoing Brexit negotiations.
The pound GBP=D3 was down 0.16% at $1.3027, while the euro EURGBP=D3 was up 0.09% at 85.83 pence.
======================================================== Currency bid prices at 10:16AM (1416 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1180 $1.1194 -0.13% -2.52% +1.1219 +1.1176 Dollar/Yen JPY= 111.5400 111.3700 +0.15% +1.16% +111.6600 +111.3600 Euro/Yen EURJPY= 124.73 124.74 -0.01% -1.18% +125.1100 +124.6900 Dollar/Swiss CHF= 1.0196 1.0179 +0.17% +3.89% +1.0203 +1.0171 Sterling/Dollar GBP= 1.3024 1.3049 -0.19% +2.09% +1.3081 +1.3025 Dollar/Canadian CAD= 1.3456 1.3441 +0.11% -1.33% +1.3467 +1.3430 Australian/Doll AUD= 0.7008 0.7013 -0.07% -0.58% +0.7029 +0.7001 arEuro/Swiss EURCHF= 1.1401 1.1395 +0.05% +1.31% +1.1427 +1.1394 Euro/Sterling EURGBP= 0.8581 0.8577 +0.05% -4.49% +0.8598 +0.8568 NZ NZD= 0.6616 0.6621 -0.08% -1.50% +0.6639 +0.6612 Dollar/DollarDollar/Norway NOK= 8.7460 8.6716 +0.86% +1.25% +8.7509 +8.6608 Euro/Norway EURNOK= 9.7797 9.7093 +0.73% -1.28% +9.7860 +9.7080 Dollar/Sweden SEK= 9.5548 9.5407 +0.00% +6.59% +9.5627 +9.5136 Euro/Sweden EURSEK= 10.6826 10.6824 +0.00% +4.08% +10.7042 +10.6660
