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Dollar edges up in steady markets before central bank meetings

Dollar edges up in steady markets before central bank meetings

FILE PHOTO: A U.S. dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic

NEW YORK : The U.S. dollar edged up on Tuesday in narrow-range trading as markets awaited news from upcoming central bank meetings that might spark volatility.

After a report showed that U.S. consumers were more confident about the economy than expected, the dollar index rose modestly and was up 0.1per cent at 93.9280 at 3:30 p.m. EDT (1903 GMT).

The greenback mostly hovered around a point midway between its one-year high reached earlier this month and the one-month low touched early on Monday.

Analysts said the dollar might continue to hold steady pending a slew of central bank meetings and economic data that could shift views on interest rates, inflation and growth rates.

Yields on 10-year U.S. and German government securities also stayed in narrow ranges before the yield on the benchmark U.S. 10-year note slipped to 1.6185per cent in the afternoon in New York.

"The markets are just pausing right now," said Joseph Trevisani, senior analyst at FXStreet.com.

The Bank of Canada meets on Wednesday and the European Central Bank and Bank of Japan convene on Thursday. Next week brings meetings of the U.S. Federal Reserve, Bank of England, Reserve Bank of Australia and Norway's Norges Bank.

The euro was down 0.1per cent at US$1.1597. The euro has been weakened recently by expectations that the ECB will take a dovish stance when it meets. Doing so would come in the face of news on Tuesday that inflation expectations for the euro zone among bond investors had reached a seven-year high above 2.07per cent.

Bigger currency movements came from the British pound, the Australian dollar and the Japanese yen.

Sterling rose to more than US$1.38 after British retailers reported stronger-than-expected sales in October, affirming the prospect of higher rates. The pound then slipped back and was flat for the day at US$1.3764.

The Aussie, which tends to move with commodity prices, gained 0.2per cent to US$0.7506. Last week, it traded above US$0.75 for the first time since July.

The U.S. dollar rose 0.4per cent against the Japanese yen, with the pair at 114.1400, below the four-year high of 114.695 reached last week.

The Bank of Japan is expected to maintain its massive stimulus program and slash this year's inflation forecast when it meets on Thursday, showing again that it has no intention of following other central banks in backing away from pandemic policies.

The Canadian dollar gained slightly on the greenback as oil prices rose but was held back by the approaching Bank of Canada meeting.

The Bank of Canada is expected to raise its inflation forecast and to largely end stimulus from its pandemic-era bond-buying program.

So far in 2021, energy-exporting currencies whose central banks are preparing to tighten - such as the Canadian dollar or Norwegian crown - have outperformed, ING strategists noted.

Bitcoin was down 1per cent at US$62,343 at 1903 GMT.

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Currency bid prices at 3:03PM (1903 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index

93.9280 93.8420 +0.11per cent 4.386per cent +94.0240 +93.7030

Euro/Dollar

US$1.1597 US$1.1611 -0.11per cent -5.07per cent +US$1.1626 +US$1.1585

Dollar/Yen

114.1400 113.7200 +0.38per cent +10.48per cent +114.3050 +113.6800

Euro/Yen

132.36 132.01 +0.27per cent +4.29per cent +132.6600 +131.9800

Dollar/Swiss

0.9196 0.9200 -0.03per cent +3.96per cent +0.9226 +0.9188

Sterling/Dollar

US$1.3764 US$1.3768 -0.03per cent +0.75per cent +US$1.3829 +US$1.3758

Dollar/Canadian

1.2384 1.2382 +0.05per cent -2.72per cent +1.2396 +1.2350

Aussie/Dollar

US$0.7506 US$0.7491 +0.21per cent -2.41per cent +US$0.7525 +US$0.7485

Euro/Swiss

1.0666 1.0677 -0.10per cent -1.30per cent +1.0703 +1.0662

Euro/Sterling

0.8424 0.8431 -0.08per cent -5.74per cent +0.8437 +0.8403

NZ

Dollar/Dollar US$0.7162 US$0.7167 -0.06per cent -0.26per cent +US$0.7193 +US$0.7153

Dollar/Norway

8.3575 8.3610 +0.07per cent -2.56per cent +8.3755 +8.3215

Euro/Norway

9.6940 9.6985 -0.05per cent -7.39per cent +9.7145 +9.6689

Dollar/Sweden

8.6166 8.6049 +0.04per cent +5.13per cent +8.6286 +8.5901

Euro/Sweden

9.9933 9.9890 +0.04per cent -0.82per cent +10.0084 +9.9748

(Reporting by David Henry in New York and Elizabeth Howcroft in London; Additional reporting by Tom Westbrook in Singapore; Editing by John Stonestreet, Angus MacSwan and Jonathan Oatis)

Source: Reuters

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