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

Dollar looks stronger as euro and sterling dip

06/11/2021 | 03:10pm EDT
FILE PHOTO: U.S. one dollar banknotes are seen in front of displayed stock graph

By Sinéad Carew

NEW YORK (Reuters) - The euro and sterling dipped against the dollar on Friday as investors bet interest rates would stay lower for longer in Europe and Britain while looking ahead to next week's U.S. monetary policy meeting.

The dollar index, showing its strongest weekly gain since early May, was last up 0.57% on the day at 90.5810 while the euro was down 0.63% at $1.2099, on track for its biggest weekly decline since the end of April.

A day after the European Central Bank stuck to its dovish stance, ECB policymaker Klaas Knot said that flexible fiscal rules would be needed for years as monetary policy remains constrained.

"ECB policy makers are indicating that inflation rates are way below levels that are needed to put upward pressure on rates," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

"That's cutting away at the euro's recent rally, putting some downward pressure on it. The biggest contributor to the move we've seen overnight is the (euro) weakness as opposed to idiosyncratic dollar positive forces. The dollar's winning the reverse beauty contest," Schamotta added.

Sterling was down 0.54% at $1.4098 as traders worried about slower-than-expected growth as the rapid spread of the Delta variant in Britain raised concerns that much of the country may not be able to fully reopen from a COVID-19 pandemic-related lockdown on June 21, as previously hoped.

Currency markets had been sluggish all week in anticipation of Thursday's release of U.S. consumer prices, which rose 5% year-on-year in May.

But even with the number above expectations, there was little market reaction. Investors seemed to back the Federal Reserve's assertion that high inflation would be temporary.

Economists see the central bank announcing in August or September a strategy for reducing its massive bond-buying program, but do not expect it to start cutting monthly purchases until early next year, a Reuters poll found.

Traders were still preparing for volatility around the Federal Open Market Committee meeting scheduled for the week ahead, according to Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets

"If you're starting from a position where you're already short dollars, since FOMC meetings often have a lot of volatility, you might reduce your short for risk management purposes," Anderson said.

Meanwhile investors left riskier currencies such as the Australian dollar, which was down 0.72% at $0.7697 after hitting its lowest level for the week while the New Zealand dollar was off 1.01% at $0.7123 after touching its lowest level since May 4.

In cryptocurrencies, bitcoin, which recovered slightly in recent sessions, was on track for a 3% weekly gain and last up 0.3% at $36,817.94 on the day. Ether was last down 3% and set for an 11.7% weekly drop. Both are still trading significantly below their earlier peaks.

(Additional reporting by Elizabeth Howcroft in London; Editing by Emelia Sithole-Matarise, Will Dunham and Pravin Char)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) 0.28% 0.92978 Delayed Quote.-5.95%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.39% 0.62556 Delayed Quote.-1.60%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.44% 80.987 Delayed Quote.1.27%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) -0.08% 1.04855 Delayed Quote.-1.60%
AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) 0.38% 0.67124 Delayed Quote.-2.13%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.27% 0.74184 Delayed Quote.-4.33%
BITCOIN - EURO -0.99% 31913.35 Real-time Quote.36.60%
BITCOIN - UNITED STATES DOLLAR -1.19% 37817.72 Real-time Quote.32.47%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) -0.17% 1.8782 Delayed Quote.6.29%
BRITISH POUND / EURO (GBP/EUR) 0.21% 1.17532 Delayed Quote.4.55%
BRITISH POUND / US DOLLAR (GBP/USD) 0.11% 1.3933 Delayed Quote.1.58%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.10% 0.673025 Delayed Quote.4.67%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.06% 0.79767 Delayed Quote.1.86%
DOW JONES FXCM DOLLAR INDEX -0.13% 11875.03 Delayed Quote.1.90%
INDIAN RUPEE / AUSTRALIAN DOLLAR (INR/AUD) -0.15% 0.018175 Delayed Quote.2.61%
INDIAN RUPEE / EURO (INR/EUR) 0.14% 0.011365 Delayed Quote.1.10%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.09% 0.01348 Delayed Quote.-1.77%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.37% 0.70745 Delayed Quote.-2.69%
US DOLLAR / AUSTRALIAN DOLLAR (USD/AUD) -0.27% 1.348072 Delayed Quote.4.53%
US DOLLAR / EURO (USD/EUR) 0.12% 0.843483 Delayed Quote.2.87%
Latest news "Economy & Forex"
05:56aRothschild-backed RIT co-leads funding for crypto platform Aspen Digital
05:53aEuro zone business surged in July but price pressures and COVID weigh
05:48aThai central bank keeps rate at record low, cuts GDP outlook amid COVID surge
05:47aInvestors call for urgent action by steelmakers on carbon emissions
05:43aSpurred by pandemic, Barcelona backs greener, car-free future
05:40aUK private-sector growth slows to weakest since March - PMI data
05:37aTOYOTA MOTOR : Honda beat profit estimates but are wary of extended chip crunch
05:21aEuro zone retail sales rise again in June after May surge
05:20aEuro zone business surged in July but price pressures and COVID weigh
05:05aGold firms on subdued dollar as investors strap in for U.S. data
Latest news "Economy & Forex"