Dollar drifts higher vs yen ahead of U.S. inflation
Data due at 1330 GMT
Central bank meetings coming up in U.S., Europe, UK,Switzerland
The dollar was firm on Tuesday leading in to the release of U.S. inflation data and the final Federal Reserve meeting of the year, with investors waiting to update interest rate outlooks.
A month ago, a small surprise to the downside unleashed a wave of bond-buying and dollar selling on the expectation that inflation had peaked. The U.S. figures, due at 1330 GMT, will test that assumption, while the Fed decision on Wednesday should provide some reasonably instant feedback from policymakers.
The dollar gained 0.8% on the yen JPY=EBS on Monday and was steady at 137.70 yen through the Asia session on Tuesday. It also held onto gains versus the Australian dollar AUD=D3 at $0.6759.
Economists polled by Reuters expect November core inflation to be steady at 0.3% month-on-month USCPF=ECI but see moderation in the annual pace, with headline prices seen 7.3% higher than a year earlier USCPNY=ECI .
"A miss in either direction may get the markets to assume a follow-up reaction from the Fed," said NatWest Markets' head of economics and strategy, John Briggs.
The U.S. dollar has been supported by high and rising interest rate expectations as the Fed has hiked its benchmark funds rate to counter inflation, leaving the currency vulnerable to selling if inflation seems to be cooling.
The dollar index =USD hovered at 105.01 on Tuesday, down from a 20-year high of 114.78 in late September.
Market projections for the peak in U.S. interest rates have also slipped, with futures pricing indicating the Fed funds rate - currently set between 3.75% and 4% - staying below 5%.
0#FF: The Fed is widely expected to hike the funds rate by 50 basis points on Wednesday, a step down in pace after four consecutive 75 bp hikes. FEDWATCH
The euro EUR=EBS , meanwhile, was steady at $1.0539, as was sterling GBP=D3 at $1.2268. The Swiss franc CHF=EBS was at 0.9360 per dollar as traders eyed Thursday meetings of the European Central Bank, Bank of England and Swiss National Bank.
Like the Fed, all are expected to hike by 50 bps. Later on Tuesday, British labour data is due, as well as surveys of German business conditions and sentiment.
The New Zealand dollar NZD=D3 was steady at $0.6386. The Chinese yuan CNY=CFXS slipped a bit on Monday as enthusiasm about China's COVID-19 re-opening prospects started to waver, even though Hong Kong relaxed some of its restrictions.
======================================================== Currency bid prices at 0534 GMTDescription RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR=EBS$1.0541 $1.0539 +0.00% +0.00% +1.0554 +1.0532 Dollar/Yen JPY=EBS137.6800 137.6700 +0.17% +0.00% +137.9600 +137.5600 Euro/Yen S> 145.14 145.04 +0.07% +0.00% +145.3200 +144.9100 Dollar/Swiss CHF=EBS0.9359 0.9363 -0.02% +0.00% +0.9368 +0.9354 Sterling/Dollar GBP=D31.2270 1.2274 -0.05% +0.00% +1.2290 +1.2254 Dollar/Canadian CAD=D31.3624 1.3633 -0.07% +0.00% +1.3644 +1.3613 Aussie/Dollar AUD=D30.6761 0.6747 +0.22% +0.00% +0.6774 +0.6740 NZ NZD=D3Dollar/Dollar 0.6388 0.6384 +0.05% +0.00% +0.6405 +0.6375 All spots FX=Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5E^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
- Forums
- Forex
- News: FOREX-Dollar steadies in calm before CPI and central bank storm
News: FOREX-Dollar steadies in calm before CPI and central bank storm
Featured News
Featured News
The Watchlist
1CG
ONE CLICK GROUP LIMITED
Mark Waller, MD
Mark Waller
MD
Previous Video
Next Video
SPONSORED BY The Market Online