Author: Don Obrien

RPT-FOREX-Dollar edges higher as oil slows, U.S. yields rise

 (Repeats to CAD/ code. No changes to text.)
    * Graphic: World FX rates

    By Herbert Lash and Ritvik Carvalho
    NEW YORK/LONDON, Aug 25 (Reuters) - The dollar edged up on
Wednesday as oil prices slowed after a big two-day advance, U.S.
Treasury yields moved higher and investors awaited clues on the
tapering of economic support by the Federal Reserve at this
week's Jackson Hole symposium.
    Risk appetite in global markets improved after the U.S. Food
and Drug Administration fully approved the COVID-19 vaccine
developed by Pfizer and BioNTech in a move
that could accelerate U.S. inoculations.
    Dr. Anthony Fauci, the top U.S. infectious disease expert,
said on Tuesday that the United States could get COVID-19 under
control by early next year.
    But the focus has turned to the Jackson Hole symposium and
what Fed Chair Jerome Powell may say about tapering the U.S.
central bank's bond-buying program when he speaks on Friday. 
    The markets expect Powell to sound dovish and echo concerns 
last week by Robert Kaplan, the Dallas Fed president, who said
he might reconsider the start to tapering due to the Delta
variant of the coronavirus, said Shaun Osborne, chief FX
strategist at Scotiabank in Toronto.
    "The risk is that Powell does not really say anything too
different but by virtue of not backing up Kaplan, comes across
as more hawkish," Osborne said.
    The dollar picked up support as Treasury yields nudged
higher, he said. The benchmark 10-year Treasury note rose 4.4
basis points to yield 1.33%. 
    The dollar index, which measures the U.S. currency
against a basket of six major trading currencies, rose 0.028% to
    The euro gained 0.03% at $1.1757, while the yen
 rose 0.36% at $110.0200. 
    The greenback had rallied until the start of this week, with
the dollar index hitting a 9-1/2-month high of 93.734 on Friday,
on fears over the Delta variant's economic impact and as the Fed
 signaled its tapering of monetary stimulus was likely this
    Vasileios Gkionakis, global head of FX strategy at Lombard
Odier Group, said there's been skittishness over growth and
sector rotations, which has boosted the dollar because of its
safe-haven status.
    "In the short term, we're still going to be trading in
ranges, with upside bias," Gkionakis said.
    Dollar underperformance after Jackson Hole could be a buying
opportunity ahead of the release of U.S. data next week,
including the non-farm payrolls report for August, said Valentin
Marinov, head of G10 FX research at Credit Agricole.
    "Potential positive surprises from the NFP in particular
could put QE (quantitative easing) taper back among the main FX
market drivers and support the USD," Marinov said.
    Sterling traded 0.03% lower at $1.3723 after rising
to as high as $1.37475 on Tuesday, its strongest since Nov. 19.
    Australia's dollar dropped 0.09% to $0.7265 after
touching a one-week high of $0.7271 in the previous session.
    The dollar gained 0.3% to 1.2624 against the Canadian dollar
as commodity prices, and especially crude oil, have moderated. 
    Brent crude, the international benchmark, rose $0.37
at $71.42 a barrel after gaining 9% on Monday and Tuesday from
last week's close.     
    The Canadian currency still looks fundamentally undervalued
but the case for a significant rebound after recent volatility
has weakened, Osborne said. The narrowing of U.S.-Canadian
spreads will make it harder for the Canadian dollar to
strengthen materially for now, he said.
    "Generally, we expect the U.S. dollar to grind higher in the
next few weeks and months," he said. 

    Currency bid prices at 11:58AM (1558 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
 Dollar index                 92.9360        92.9130     +0.03%         3.284%        +93.1350    +92.8720
 Euro/Dollar                  $1.1758        $1.1757     +0.01%         -3.76%        +$1.1760    +$1.1726
 Dollar/Yen                   110.0200       109.6800    +0.32%         +6.49%        +110.1000   +109.6650
 Euro/Yen                     129.35         128.93      +0.33%         +1.91%        +129.4000   +128.7700
 Dollar/Swiss                 0.9135         0.9129      +0.07%         +3.26%        +0.9157     +0.9127
 Sterling/Dollar              $1.3723        $1.3729     -0.03%         +0.46%        +$1.3743    +$1.3699
 Dollar/Canadian              1.2624         1.2589      +0.28%         -0.86%        +1.2643     +1.2589
 Aussie/Dollar                $0.7265        $0.7259     +0.09%         -5.56%        +$0.7267    +$0.7238
 Euro/Swiss                   1.0741         1.0731      +0.09%         -0.61%        +1.0749     +1.0724
 Euro/Sterling                0.8565         0.8559      +0.07%         -4.16%        +0.8569     +0.8552
 NZ                           $0.6962        $0.6954     +0.14%         -3.03%        +$0.6966    +$0.6930
 Dollar/Norway                8.8190         8.8335      +0.28%         +3.16%        +8.8610     +8.8200
 Euro/Norway                  10.3700        10.3697     +0.00%         -0.93%        +10.4060    +10.3509
 Dollar/Sweden                8.6966         8.6940      +0.14%         +6.10%        +8.7215     +8.6849
 Euro/Sweden                  10.2273        10.2135     +0.14%         +1.50%        +10.2365    +10.1996
 (Reporting by Ritvik Carvalho; Additional reporting by Kevin
Buckland in Tokyo; Editing by Jan Harvey, Bernadette Baum and
Barbara Lewis)

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