News: FOREX-Dollar stuck near 5-month low as caution reigns ahead of U.S. CPI, ECB tests

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
The dollar continued to hover near a five-month low versus major peers on Thursday as investors looked to key U.S. inflation data and a European Central Bank meeting later in the day to potentially set the direction for currency markets.
Investors have adopted a wait-and-see attitude all week, sucking volatility from the market and leaving major currencies mostly range-bound.
The dollar index =USD has fluctuated narrowly around the psychologically important 90 level, and was last at 90.137.
The euro EUR=EBS rose to a one-week high at $1.2218 on Wednesday only to finish little changed, and was essentially flat at $1.2178 in Asia.
The yen JPY=EBS traded at 109.62 per dollar, also little changed from Wednesday and near the middle of the 109.19-110.325 range of the past two weeks.
Deutsche Bank's Currency Volatility Index .DBCVIX languished at its lowest level since February 2020.
The U.S. Labor Department's consumer prices data has been much anticipated after last month's report showed consumer prices increased by the most in nearly 12 years in April.
That has stoked bets that higher prices could last longer than some anticipate, potentially calling into question the Federal Reserve's insistence that current inflation pressures are transitory and monetary stimulus should stay in place for some time yet.
Economists polled by Reuters estimated the CPI advanced 0.4% in May.
While the greenback has kept to tight ranges in the run-up to the report, benchmark 10-year Treasury yields US10YT=RR - which helped drive the dollar index to a multi-year high earlier this year - has taken a sizeable step lower in the past week and was at 1.4874% in Asia from as high as 1.6350% on Friday.
"It feels like the balance of risk is tilted to the upside on U.S. CPI versus the consensus, which would favour a sell-off in Treasuries - (and thus) higher yields - and subsequently a stronger USD," Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a note to clients.
"Bonds seem overbought." With the ECB, investors will be watching for any clues of an imminent slowdown to its bond-buying program.
While the ECB is widely expected to keep policy settings steady, the euro could be sensitive to changes in the bank's economic forecasts or any signal that the pace of bond buying could be reduced in months ahead.
In crypto markets, bitcoin BTC=BTSP held gains from its biggest rally in four months on Wednesday, when it jumped nearly 12%. It last traded little changed at $37,097.02, after rebounding from a three-week low of $31,025 hit on Tuesday when signs of institutional investor caution and regulatory attention drove selling.
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	Currency bid prices at 0049 GMT 
 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.2175		$1.2179	 -0.02%		 -0.34%	  +1.2181	 +1.2176 
 Dollar/Yen		JPY=EBS	109.5900	   109.6450	-0.03%		 +6.12%	  +109.6750   +109.6150 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.8961		 0.8960	  +0.01%		 +1.28%	  +0.8962	 +0.8958 
 Sterling/Dollar   GBP=D3	 1.4111		 1.4114	  +0.00%		 +3.30%	  +1.4115	 +1.4110 
 Dollar/Canadian   CAD=D3	 1.2119		 1.2110	  +0.09%		 -4.82%	  +1.2119	 +1.2108 
 Aussie/Dollar	 AUD=D3	 0.7724		 0.7731	  -0.08%		 +0.42%	  +0.7731	 +0.7724 
 NZ				NZD=D3	 0.7168		 0.7178	  -0.13%		 -0.18%	  +0.7178	 +0.7168 
 Dollar/Dollar																				   
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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