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TOKYO — The U.S. dollar remained on the
back foot against major peers on Wednesday after a two-day drop
as U.S. Federal Reserve officials including Chair Jerome Powell
reaffirmed that tighter monetary policy was still some way off.
The dollar index, which measures the greenback versus
six rivals, was at 91.775 in early Asian trading, off a
two-month high of 92.408 reached at the end of last week.
It has now given up about a third of its sharp gains posted
since last Wednesday, when the Fed surprised markets by
signaling much earlier rate hikes than investors previously
expected.
Overnight, both Powell and New York Fed President John
Williams warned that the economic recovery requires more time
before a tapering of stimulus and higher borrowing costs are
appropriate.
“Latest smoke signals from the Fed … all point to
September as the meeting when the Fed is, on current trends,
most likely to declare that substantial further progress towards
their goals has been achieved, or is being achieved,” Ray
Attrill, head of foreign-exchange strategy at National Australia
Bank in Sydney, wrote in a client note, forecasting tapering
likely won’t start until early next year.
“Their comments have seen markets row back somewhat from
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their largely position-driven convulsions last week.”
The euro was little changed on Wednesday at
$1.19340, after rebounding from as low as $1.18470 at the end of
last week.
The Aussie dollar, often viewed as a proxy for risk
sentiment, was largely flat at $0.7546, up from a recent low of
$0.7478.
The yen, which tends to move inversely to U.S.
Treasury yields, was mostly unchanged at 110.740 per dollar,
close to the 110.825 mark reached last week for the first time
since April 1.
Benchmark 10-year Treasury yields edged lower in
Asia to 1.4616%, from as high as 1.5940% a week ago.
“We will not raise interest rates pre-emptively because we
fear the possible onset of inflation,” Powell said on Tuesday in
a hearing before a U.S. House of Representatives panel. “We will
wait for evidence of actual inflation or other imbalances.”
Williams said Fed officials will keep a close eye on
economic data to determine when it will be appropriate to start
adjusting monetary policy. “That’s still quite a ways off.”
Producer price inflation data on Friday is the next major
economic focus for the United States.
Elsewhere, bitcoin traded at around $33,700 after
dipping as low as $28,600 on Tuesday for the first time since
early January amid a deepening Chinese crackdown on
cryptocurrencies.
Declines over the past two months have cut gains for the
year to just 16%. It was at a record $64,895.22 as recently as
April 14.
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Currency bid prices at 0110 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.1932 $1.1942 -0.08% -2.34% +1.1943 +1.1930
Dollar/Yen 110.7900 110.6600 +0.11% +7.25% +110.7950 +110.6400
Euro/Yen
Dollar/Swiss 0.9190 0.9183 +0.09% +3.88% +0.9191 +0.9183
Sterling/Dollar 1.3937 1.3946 -0.05% +2.03% +1.3955 +1.3938
Dollar/Canadian 1.2319 1.2308 +0.09% -3.27% +1.2321 +1.2303
Aussie/Dollar 0.7546 0.7556 -0.12% -1.90% +0.7560 +0.7545
NZ 0.7009 0.7021 -0.11% -2.34% +0.7025 +0.7009
Dollar/Dollar
All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Kevin Buckland; Editing by Muralikumar
Anantharaman)
