U.S. inflation and European Central Bank meet on Thursday

3 minutes

Graphic: World FX Rates https: tmsnrt.rs 2 RBWI 5 E By Kevin Buckland TOKYO, June 10 - The dollar continued to hover on Thursday compared to major peers as investors looked to key U.S. inflation data and a European Central Bank meeting later in the day to potentially tell the direction for currency markets. Investors have adopted a wait-and-see attitude all week, excluding volatility from the market and leaving major currencies mostly range-bound. The currency index has fluctuated only low and psychologically under the 90 level. It was last at 90.137 The euro rose on Wednesday to a one week high of $1.2218, only to finish little changed and it was essentially flat at $1.2178 in Asia. The yen closed at 109.62 per dollar, was also very little changed from Wednesday and the middle of the range 109.19 -- 110.325 of the past two weeks. Since February 2020, the currency volatility index of Deutsche Bank has languished at its lowest level. According to the U.S. Labor Department's Consumer Price Monitor, April's consumer prices are highly anticipated after the government's April report stated consumer prices increased the most in nearly 12 years. That has stoked bets that higher prices could last longer than some believe and potentially call into question the Federal Reserve's insistence that current inflation pressures are transitory and economic stimulus should stay in place for some time yet. Economists polled by Reuters estimated that the CPI advanced 0.4% in May. While the greenback kept to tight ranges in the run-up to the report, the benchmark 10-year Treasury yields - which helped drive the dollar index into a multi-year high earlier this year - have been pushed downward on the past week and held at 1.4874% in Asia from as strong as 1.6350% on Friday. It feels like the balance of risk is tilted toward the upside on U.S. CPI against the consensus, which would favor a stronger USD - higher yields and subsequently lower USD, wrote Chris Weston, Head of Research for the Pepperstone in Melbourne, in a note to clients. Bonds seem overbought. Investors with the ECB will be watching for any signs of an imminent slowdown to its bond buying program. While the ECB is widely expected to keep policy settings unchanged, 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 the crypto markets, bitcoin lost on Wednesday from its biggest rally in four months when it jumped nearly 12%. On Tuesday it trading little changed at $37,097.02, after rebounding from a three-week low of $31,025 hit, when signs of institutional investor caution and regulatory attention drove buying. U.S. dollar 0.91% 0.42% Canadian 1.2119 1.2119 1.2108 currency Bid High Bid Priority Change SEssion Euro Dollar $1.2175 $1.2179 -- 0.02% - 0.34% 1.2181 1.2176 Dollar Yen 0.9960 0.01% 1.28% 0.8958 Sterling Dollar 1.4111 1.4110 0.00% 2.412 $$ 0.7724 $0.7178 0.6178 0.5178 Dollar All spots Tokyo Forex Market Info from

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