FOREX-Dollar bounces back ahead of U.S. inflation test

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LONDON, Nov 10 (Businesshala) – The US dollar bounced back against key peers on Wednesday after weakening over the past three days, with investors betting ahead of US inflation data, which weighed on policymakers to raise interest rates from record levels. can create pressure.

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Falling yields for the US Treasury had put some downward pressure on the dollar recently, but a rebound of nearly three basis points to 1.486% for 10-year government bonds on Wednesday helped prop up the currency.

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“The flattening fury in US bond yields ahead of US CPI has been replaced by a mild rebound this morning,” commented Kenneth Brooks, an FX strategist at Societe Generale.

“After profit-booking in the last three days, the dollar is a better bid,” he said.

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The US consumer price index, later on Wednesday, is forecast by a Businesshala poll of economists to come in at an annualized 4.3%, versus the US Federal Reserve’s average annual 2% inflation target.

The Fed last week reiterated its belief that current high inflation is temporary, but many investors fear that underestimating price increases could prove to be a costly policy mistake.

At 1205 GMT, the dollar index, which measures the greenback against six rivals, rose 0.33% to 94.279 after falling from a more than a year high of 94.634 on Friday.

Against Japan’s yen, the greenback fell below its last low since October 11 and rose 0.28% to 113.195 yen.

The euro fell 0.39% to $1.1551.

Sterling retreated 0.41% to $1.3505 after the Bank of England’s surprise decision to keep rates unchanged last week, but stood well above Friday’s one-month low of $1.3425.

Fears of a possible transition from the crisis in China’s property market also fueled the search for safer assets.

China’s Evergrande faces a deadline on Wednesday to pay off an offshore bond, and the Casa Group pleaded Tuesday for help paying off debt, workers and suppliers.

The Aussie fell 0.32% to $0.73555 but gradually narrowed its losses to a drop of 0.07%. New Zealand’s kiwi fell 0.54% to $ 0.7091.

Among cryptocurrencies, bitcoin hovered below the all-time high of $68,564.40 marked on Tuesday, with the last time changing hands around $66,725. Ether was in sight of Tuesday’s record peak of $4,842.65.

Reporting by Julian Ponthus and Saikat Chatterjee; Editing by Amelia Sithol-Mataris and Bernadette Baum


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