FOREX-Dollar Closes As US Inflation Poses Next Test

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Band Tom Westbrook

SYDNEY, November 8 (Reuters)The dollar got off to a good start to the week on Monday, but was held below Friday’s peaks as currency traders seek a path between volatile market interest rate projections and central bankers pledging to keep prices going. low rate even if inflation increases.

The numbers expected on Wednesday are expected to show consumer price growth in the United States at 5.8% year-on-year, the next big test of confidence in the Federal Reserve’s insistence on being patient with rate hikes. interest.

In early Asian trade, the dollar was slightly higher against the yen JPY = EBS and fell from a one-week low to 113.49 yen.

After briefly hitting a 15-month high of $ 1.15135 on the euro EUR = EBS In the wake of good US employment data on Friday, the greenback stabilized at $ 1.1566 per euro.

Sterling GBP = D3, which was shocked when the Bank of England surprised traders by holding rates stable last week, fell to a five-week low at $ 1.3425 on Friday, before rebounding to hold at $ 1.3487 Monday.

The Bank of England’s surprise sparked a sharp reversal late last week in what had become fairly aggressive bets on impending rate hikes in Britain and around the world, as stocks meandered higher in the maelstrom of bond markets.

“Central banks have distorted many markets, inflating the stock market and the bond market,” said Jason Wong, strategist at Bank of New Zealand in Wellington.

“Currencies are sort of in the middle of it all, wondering what’s going on,” he said, with the market appearing to be holding up but risks mounting, especially in China where the slowdown in the economy has global implications.

Risk-sensitive Australian and New Zealand dollars struggled to advance in early trade, the Aussie AUD = D3 pinned just below $ 0.74 and the New Zealand dollar NZD = D3 about $ 0.7108. EUR /

“AUD / USD risks remain on the downside this week in our view,” Commonwealth Bank of Australia analyst Kim Mundy said, especially if US inflation data is strong or jobs data Australian Thursday are particularly weak.

“A dip to $ 0.7300 is possible,” she said.

Elsewhere, data from the weekend showed Chinese exports were surprisingly strong, but imports were surprisingly weak in another indicator of disappointing demand, especially as China tightens restrictions on movement to bring COVID- 19.

The Communist Party begins a meeting on Monday that is expected to pass a resolution praising President Xi Jinping and laying the groundwork for a third term for his leadership.

Traders are also anxiously awaiting Chinese producer and consumer price data expected on Wednesday, with annual producer price growth expected to reach 12%, perhaps a harbinger of further pressure. on prices across global supply chains.

Chinese yuan CNH = was slightly weaker at the start of trade at 6.3951 per dollar. The US dollar index was held steady at 94.225, placing it roughly in the upper half of a range it has been trading for just over a month.

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Currency bid price at 0013 GMT

The description

RIC

Last

US Close previous session

PCT change

Percentage change for the current year

High offer

Low offer

Euro dollar

EUR = EBS

$ 1.1566

$ 1.1567

+ 0.00%

-5.34%

+1.1570

+1.1555

Dollar / Yen

JPY = EBS

113.5400

113.3750

+ 0.00%

+ 9.76%

+113.5600

+0.0000

Euro / yen

EURJPY = EBS

131.32

131.16

+ 0.12%

+ 3.47%

+131.3400

+131.0800

Dollar / Switzerland

CHF = EBS

0.9122

0.9121

+ 0.00%

+ 3.09%

+0.9123

+0.9121

Pound sterling / dollar

GBP = D3

1.3488

1.3488

+ 0.00%

-1.27%

+1.3491

+1.3482

Canadian dollar

CAD = D3

1.2455

1.2460

-0.06%

-2.21%

+1.2456

+1.2440

Australia / Dollar

AUD = D3

0.7392

0.7401

-0.12%

-3.91%

+0.7402

+0.7392

New Zealand dollar / Dollar

NZD = D3

0.7105

0.7120

-0.20%

-1.04%

+0.7115

+0.7101

All spots FX =

Tokyo spots AFX =

Points of Europe EFF =

Volatilities VOLFX =

BOJ Tokyo Forex Market Information TKYFX

Global exchange rateshttps://tmsnrt.rs/2RBWI5E

(Reporting by Tom Westbrook)

((tom.westbrook@tr.com; +65 6973 8284;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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