FOREX-Dollar Stabilizes As Traders Look To Cenbanks For Advice


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By Tom Westbrook SINGAPORE, October 26 (Reuters) – The dollar rebounded from recent lows and was firm in choppy trading on Tuesday ahead of a handful of data releases and central bank meetings that investors expect guide the rate outlook. The euro fell 0.3% overnight on weaker-than-expected German corporate morale and expectations that the European Central Bank (ECB) will remain accommodative at its meeting on Thursday. The euro last bought $ 1.1598, near a one-week low. Other overnight moves were modest, with the dollar easing slightly against the aussie, kiwi and pound sterling. It was flat on Tuesday, except for a slight rise in the Japanese yen to 113.83 yen and a slight drop in the Aussie. The US dollar index rose to 93.856. “The dollar appears to be finding its feet in the mid-’93s,” Westpac analysts said in a note, as attention turns to the ECB meeting as well as expected US growth data on Wednesday. “The focus will be on the ECB and US third quarter GDP this week. The ECB is likely pointing to an accommodative stance, while US GDP will show the rebound, but price pressures continue to intensify,” said they said, setting the stage for the Federal Reserve to announce a reduction in bond purchases as early as next week. “All in all, this should maintain short-term yield spreads in favor of the dollar and leave the dollar with a supply tone over the next few weeks.” Central bank meetings in Japan and Canada are also scheduled this week, as is the release of quarterly inflation data in Australia where rate markets disagree with the Reserve Bank of Australia (RBA) resolutely accommodating on the outlook. . The Australian dollar climbed to $ 0.7503 after climbing to $ 0.07546 last week, its highest since July. The kiwi was held at $ 0.7165. Economists expect growth in lower average consumer prices in Australia, the central bank’s preferred measure, to accelerate at an annual rate of 1.8% in the September quarter, from 1.00%. 6% in the previous three months. Inflation in Canada has also put pressure on the central bank to step up rate hikes, and traders are watching Wednesday’s meeting for hawkish clues. The Canadian dollar stands at C $ 1.2383 to the dollar, after hitting a four-month high last week, while the spread between 2-year Canadian and US yields has doubled since last month to reach 41 basis points in favor of the Canadian bond. “Any hawkish nuance would excite me at the prospect of a return to 1.20 again,” said Kit Juckes, Societe Generale strategist. The Bank of Japan is also meeting on Wednesday and Thursday, and sources told Reuters it is discussing the phasing out of a COVID-19 loan program, although a decision before December is unlikely and none. policy change is not expected this week. Beyond Friday, the Fed, RBA and Bank of England will meet next week, as markets have estimated a roughly 60% chance that the Bank of England will raise interest rates to fight the ‘inflation. The British pound strengthened on the prospect of higher rates and last stabilized at $ 1.3758. “Small open economies are prone to import price hikes, which could enter the inflation equation early,” said Brian Martin, senior international economist at ANZ Bank. “Monetary tightening is justified in this environment. The UK is a good example and the Bank of England looks set to join the first rate tightening soon. We have brought forward this quarter when we expect the BoE to start the rate normalization. ” =================================================== ====== Currency bid price at 0136 GMT Description RIC Last US close Percentage change YTD High bid Low bid 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 / Switzerland 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 Volatilities Tokyo Forex market info from BOJ (Report by Tom Westbrook, edited by Himani Sarkar)

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