Business

Dollar in doldrums as traders ponder Fed policy path, sterling soars

 

The dollar languished near multi-month lows versus major peers on Tuesday as traders pondered the prospects for early policy normalization by the Federal Reserve ahead of a key jobs report at the end of the week.
The British pound rallied to a three-month peak at $1.425 while Canada’s loonie hovered near a six-year top, amid market expectations for policy tightening in those countries.
Australia’s dollar rose for a second day to as high as $0.77605 ahead of a central bank announcement at 0430 GMT on Tuesday, although economists predict no change to monetary policy, reports Reuters.
The offshore Chinese yuan edged back toward a three-year high of 6.3526 per dollar reached Monday, last trading at 6.3640, paring a retreat spurred by the monetary authority’s tightening of banks’ FX requirements to stem the currency’s rise.
The dollar index , which tracks the greenback against six peers, was back below 90 from as high as 90.447 on Friday, when a measure of U.S. inflation closely watched by the Fed posted its biggest annual rise since 1992. The gauge sank 0.3% on Monday, in a market thinned by U.S. and British holidays.
Fed officials, led by Chair Jerome Powell, have said repeatedly they expect price pressures to be transitory and monetary stimulus to stay in place for some time, but investors are wary that a strong pandemic recovery could force the Fed’s hand.
Vice Chair Randal Quarles and Governor Lael Brainard will both be speaking at separate events on Tuesday, while nonfarm payrolls numbers on Friday will be even more closely scrutinized than usual after the much-weaker-than-expected reading a month ago.
Commonwealth Bank of Australia strategist Joseph Capurso says that trimmed measures of inflation, which eliminate the most extreme price changes, show the U.S. has no inflation problem, and markets will need to unwind some of the expectation for near-term policy tightening, which will weigh on the dollar.
The global pandemic recovery will provide an additional headwind, he said.
“The world economy is clearly recovering, and that is going to be bad for the U.S. dollar because it’s a counter-cyclical currency,” Capurso said. “The U.S. dollar has been pretty heavy in the last few weeks, and I think it keeps trending lower.”
That includes a drop to $1.24 per euro by the end of this month, extending to $1.32 by the middle of next year.
The euro gained 0.1% to $1.22325 on Tuesday, not far from a nearly five-month high of $1.2266 touched last week.
The dollar fell for a second day against the yen , weakening 0.2% to 109.375. The pair had climbed as high as 110.20 on Friday, following the inflation data.

 

TRY IT TONIGHT!!! ---

 

Abuja Civil Servant reveals (FREE) secret Fruits that Increased his Manh0d size, gives Stronger Erections and ends Premature Erection in 7days...

   

CLICK HERE FOR FULL DETAILS.

 

%d bloggers like this:
Fake Richard Mille Replica Watches, www.richardmille.to The ceramic upper and lower cases are imported from Taiwan and are processed by ATPT ceramics to form Y-TZP ceramics. After high-tech anti-fingerprint technology, they present a delicate and soft sub-black material. This color quality has remained unchanged for a hundred years. The color and luster are more detailed to achieve the ceramic tone visual pattern electroplating upper and lower shells that are infinitely close to the original products, with anti-reflective coating sapphire glass! The tape uses a soft and delicate Malaysian imported top rubber strap, and the movement is equipped with an imported Seiko NH movement. The buckle of this version is made according to the original size and thinness, making it feel more comfortable and intimate, the highest version on the market Richard Mille Replica