Author of the article:
SINGAPORE — The dollar has bounced off
recent lows and was firm in choppy trade on Tuesday ahead of a
handful of data releases and central bank meetings which
investors expect to guide the rates outlook.
The euro fell 0.3% overnight on softer-than-forecast German
business morale and expectations that the European Central Bank
(ECB) will stay dovish when it meets on Thursday.
The euro last bought $1.1598, near a one-week low.
Other overnight moves were modest, with the dollar easing a
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tad on the Aussie, kiwi and sterling. It was steady on Tuesday
save for a small rise on Japan’s yen to 113.83 yen,
and a slight dip on the Aussie.
The U.S. dollar index rose held at 93.856.
“The dollar looks to be finding its feet in the mid-93s,”
analysts at Westpac said in a note, as focus turns to the ECB’s
meeting as well as U.S. growth data due on Wednesday.
“The focus will turn to the ECB and U.S. Q3 GDP this week.
The ECB likely underscores dovish guidance, while US GDP will
show the rebound stalling, but price pressures continuing to
build,” they said, setting the scene for the Federal Reserve to
announce a reduction in bond purchases as soon as next week.
“All told that should keep short-term yield spreads trending
in the dollar’s favor and leave the dollar with a bid tone in
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the next several weeks.”
Central bank meetings in Japan and Canada are also scheduled
this week, as is the release of quarterly inflation data in
Australia where rates markets are at odds with the resolutely
dovish Reserve Bank of Australia (RBA) over the outlook.
The Australian dollar edged up to $0.7503 after
having climbed as far as $.07546 last week, its highest since
July. The kiwi held at $0.7165.
Economists expect growth in Australia’s trimmed mean
consumer prices, the central bank’s preferred measure, to have
accelerated to an annual pace of 1.8% in the September quarter
from 1.6% in the preceding three months.
Inflation in Canada has also put pressure on the central
bank to pull forward rate hikes and traders are watching
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Wednesday’s meeting for any hawkish clues.
The Canadian dollar stands at C$1.2383 per dollar,
having scaled a four-month peak last week, while the gap between
Canadian and U.S. 2-year yields has doubled since last month to
41 basis points in favor of the Canadian bond.
“Any hawkish undertones would get me over-excited about a
return to 1.20 again,” Societe Generale strategist Kit Juckes
said.
The Bank of Japan also meets over Wednesday and Thursday,
and sources have told Reuters that it is discussing phasing out
a COVID-19 loan program, though a decision before December is
unlikely and no policy changes are expected this week.
Beyond Friday, the Fed, the RBA and the Bank of England meet
next week with markets having priced a roughly 60% chance that
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the Bank of England raises interest rates to head off inflation.
Sterling has been firming at the prospect of higher
rates and was last steady at $1.3758.
“Small open economies are prone to importing price rises,
which could enter the inflation equation early,” said ANZ Bank’s
senior international economist Brian Martin.
“Monetary tightening is justified in this environment. The
UK is a case in point and the Bank of England looks poised to
join the early rate tighteners soon. We have brought forward, to
this quarter, the time when we expect the BoE to start rate
normalization.”
========================================================
Currency bid prices at 0136 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
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Previous Change
Session
Euro/Dollar $1.1607 $1.1611 -0.04% -5.00% +1.1612 +1.1599
Dollar/Yen 113.8500 113.6950 +0.14% +10.22% +113.9000 +113.7200
Euro/Yen
Dollar/Swiss 0.9206 0.9200 +0.07% +4.06% +0.9207 +0.9198
Sterling/Dollar 1.3766 1.3768 +0.01% +0.78% +1.3771 +1.3758
Dollar/Canadian 1.2372 1.2382 -0.06% -2.83% +1.2385 +1.2368
Aussie/Dollar 0.7503 0.7491 +0.16% -2.46% +0.7511 +0.7485
NZ 0.7165 0.7167 +0.04% -0.15% +0.7174 +0.7160
Dollar/Dollar
All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Tom Westbrook, Editing by Himani Sarkar)
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Author of the article: SINGAPORE — The dollar has bounced offrecent lows and was firm in choppy trade on Tuesday ahead of ahandful of data releases and central bank meetings whichinvestors expect to guide the rates outlook. The euro fell 0.3% overnight on softer-than-forecast Germanbusiness morale and expectations that the European Central Bank(ECB) will stay dovish when it meets on Thursday. The euro last bought $1.1598, near a one-week low. Other overnight moves were modest, with the dollar easing aAdvertisement This advertisement has not loaded yet, but your article continues below.tad on the Aussie, kiwi and sterling. It was steady on Tuesdaysave for a small rise on Japan’s yen to 113.83 yen,and a slight dip on the Aussie. The U.S. dollar index rose held at 93.856. “The dollar looks to be finding its feet in the mid-93s,”analysts at Westpac said in a note, as focus turns to the ECB’smeeting as well as U.S. growth data due on Wednesday. “The focus will turn to the ECB and U.S. Q3 GDP this week.The ECB likely underscores dovish guidance, while US GDP willshow the rebound stalling, but price pressures continuing tobuild,” they said, setting the scene for the Federal Reserve toannounce a reduction in bond purchases as soon as next week. “All told that should keep short-term yield spreads trendingin the dollar’s favor and leave the dollar with a bid tone inAdvertisement This advertisement has not loaded yet, but your article continues below.the next several weeks.” Central bank meetings in Japan and Canada are also scheduledthis week, as is the release of quarterly inflation data inAustralia where rates markets are at odds with the resolutelydovish Reserve Bank of Australia (RBA) over the outlook. The Australian dollar edged up to $0.7503 afterhaving climbed as far as $.07546 last week, its highest sinceJuly. The kiwi held at $0.7165. Economists expect growth in Australia’s trimmed meanconsumer prices, the central bank’s preferred measure, to haveaccelerated to an annual pace of 1.8% in the September quarterfrom 1.6% in the preceding three months. Inflation in Canada has also put pressure on the centralbank to pull forward rate hikes and traders are watchingAdvertisement This advertisement has not loaded yet, but your article continues below.Wednesday’s meeting for any hawkish clues. The Canadian dollar stands at C$1.2383 per dollar,having scaled a four-month peak last week, while the gap betweenCanadian and U.S. 2-year yields has doubled since last month to41 basis points in favor of the Canadian bond. “Any hawkish undertones would get me over-excited about areturn to 1.20 again,” Societe Generale strategist Kit Juckessaid. The Bank of Japan also meets over Wednesday and Thursday,and sources have told Reuters that it is discussing phasing outa COVID-19 loan program, though a decision before December isunlikely and no policy changes are expected this week. Beyond Friday, the Fed, the RBA and the Bank of England meetnext week with markets having priced a roughly 60% chance thatAdvertisement This advertisement has not loaded yet, but your article continues below.the Bank of England raises interest rates to head off inflation. Sterling has been firming at the prospect of higherrates and was last steady at $1.3758. “Small open economies are prone to importing price rises,which could enter the inflation equation early,” said ANZ Bank’ssenior international economist Brian Martin. “Monetary tightening is justified in this environment. TheUK is a case in point and the Bank of England looks poised tojoin the early rate tighteners soon. We have brought forward, tothis quarter, the time when we expect the BoE to start ratenormalization.”========================================================Currency bid prices at 0136 GMT Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low BidAdvertisement This advertisement has not loaded yet, but your article continues below. Previous Change Session Euro/Dollar $1.1607 $1.1611 -0.04% -5.00% +1.1612 +1.1599 Dollar/Yen 113.8500 113.6950 +0.14% +10.22% +113.9000 +113.7200 Euro/Yen Dollar/Swiss 0.9206 0.9200 +0.07% +4.06% +0.9207 +0.9198 Sterling/Dollar 1.3766 1.3768 +0.01% +0.78% +1.3771 +1.3758 Dollar/Canadian 1.2372 1.2382 -0.06% -2.83% +1.2385 +1.2368 Aussie/Dollar 0.7503 0.7491 +0.16% -2.46% +0.7511 +0.7485 NZ 0.7165 0.7167 +0.04% -0.15% +0.7174 +0.7160 Dollar/DollarAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJ (Reporting by Tom Westbrook, Editing by Himani Sarkar)Financial Post Top StoriesSign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc. By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300