Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Dollar edges down after inflation data, ahead of FOMC

06/10/2021 | 03:36pm EDT
FILE PHOTO: Four thousand U.S. dollars are counted out by a banker at a bank in Westminster

By Sinéad Carew

NEW YORK (Reuters) - The dollar index was down slightly on Thursday after alternating between losses and gains earlier in the session as investors digested elevated U.S. inflation and European Central Bank commentary while eyeing the U.S. Federal Reserve's next meeting.

After adopting a wait-and-see attitude all week, sucking volatility from the market and leaving major currencies mostly range-bound, Thursday's developments appeared to add little new direction to currency markets.

Earlier in the day, the ECB raised its growth and inflation views but promised to keep ample stimulus flowing, fearing that a retreat now would accelerate a worrisome rise in borrowing costs and choke off recovery.

Then in the United States, data showed that the number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly 15 months, while consumer prices increased further in May as the pandemic's easing grip on the economy continued to boost domestic demand.

While emerging market currencies such as the Turkish lira showed more pronounced reactions, dollar traders were already cautiously looking ahead to the U.S. Federal Open market Committee (FOMC) policy meeting scheduled for next week.

"The dollar's on the sidelines as it looks for the next key event risk and that's the FOMC meeting and the prospects the Fed might begin the talk of tapering, which could provide support to the dollar," said Paresh Upadhyaya, director of fixed income and currency strategy at Amundi U.S.

Investors were closely watching U.S. consumer prices for any signs that higher prices could last longer than expected, potentially challenging the Fed's insistence that inflation pressures are transitory and that monetary stimulus should stay in place for some time yet.

While Upadhyaya sees Thursday's data supporting the U.S. central bank's stance, he said "a lot of people fearing they could get chopped up in the price action might just want to wait" before making big bets.

The dollar index, which measures the greenback against a basket of major currencies, has fluctuated narrowly around the psychologically important 90 level, and was last down 0.08% at 90.0670 The euro was last down 0.05% at $1.2172.

"You have this tug between the two currencies, and it's creating a back and forth. That's why you're seeing a little bit of a cap in terms of dollar weakness and euro strength," said Minh Trang, senior FX trader at Silicon Valley Bank.

"The overall trend has been a bit of dollar weakness, not just because of the robust growth in the U.S. There's been robust growth overall. A lot of economies have been recovering," he said. "When you have optimism in overall global growth, typically that creates a risk on mentality that's going to favor other currencies over the dollar."

Deutsche Bank's Currency Volatility Index, was at its lowest level since February 2020.

In crypto markets, bitcoin edged higher, last up 0.4% at $36,563. The best-known crypto currency has struggled since reaching a record $64,895.22 in mid-April.

(Additional reporting by Ritvik Carvalho in London, Kevin Buckland in Tokyo; Editing by Elaine Hardcastle, Gareth Jones, Raissa Kasolowsky and Jonathan Oatis)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.33% 0.63492 Delayed Quote.0.41%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.29% 0.75759 Delayed Quote.-2.07%
BITCOIN - EURO 3.56% 28141.16 Real-time Quote.15.16%
BITCOIN - UNITED STATES DOLLAR 3.61% 33562.53 Real-time Quote.12.30%
BRITISH POUND / EURO (GBP/EUR) 0.16% 1.17045 Delayed Quote.4.47%
BRITISH POUND / US DOLLAR (GBP/USD) 0.10% 1.39631 Delayed Quote.1.83%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.14% 0.681547 Delayed Quote.5.44%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.10% 0.81282 Delayed Quote.2.90%
DOW JONES FXCM DOLLAR INDEX 0.08% 11848.38 Delayed Quote.1.49%
EURO / TURKISH LIRA (EUR/TRY) -0.08% 10.31702 Delayed Quote.15.34%
INDIAN RUPEE / EURO (INR/EUR) 0.25% 0.011292 Delayed Quote.1.04%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.25% 0.013488 Delayed Quote.-1.48%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.38% 0.7044 Delayed Quote.-2.73%
US DOLLAR / EURO (USD/EUR) 0.05% 0.838244 Delayed Quote.2.54%
US DOLLAR / TURKISH LIRA (USD/TRY) -0.06% 8.6373 Delayed Quote.18.20%
Latest news "Economy & Forex"
01:22pU.s. itc says tire imports from vietnam sold in the u.s. at less than fair value are negligible and voted to terminate the antidumping duty investigation -statement
RE
01:19pMalta says it has been greylisted by financial crimes watchdog
RE
01:19pMalta prime minister abela says fatf decision is "unjust", pledges to continue with financial reforms
RE
01:18pMalta has been put on a grey list by anti-money laundering watchdog fatf -maltese prime minister abela
RE
01:18pU.s. itc finds imports of tires from vietnam are sold in u.s. at less than fair value and subsidized by vietnamese government -statement
RE
01:15pU.s. international trade commission finds tire imports from korea, taiwan, thailand materially injure u.s. industry -- statement
RE
01:15pGARY KELLY : Southwest CEO Gary Kelly to hand reins to insider Robert Jordan
RE
01:09pREUTERS EVENTS : EDF calls for funding legislation for new UK nuclear power plant
RE
01:06pBank of England wants tougher rules for bank takeovers after Greensill
RE
12:57pU.S. House panel votes to increase fees for biggest mergers, budgets for antitrust enforcers
RE
Latest news "Economy & Forex"