FOREX-Dollar near one-month low to yen before inflation test; Aussie, kiwi slide

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TOKYO, Nov 10 (Businesshala) – The dollar went overboard against key peers on Wednesday after weakening over the past three days, and the yen was trading near a one-month low, prompting investors to look at U.S. inflation data. Waiting for when the Federal Reserve might raise interest rates.

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The safe-haven yen also benefited from a retreat from record peaks for global stocks as rising oil prices raised inflationary concerns.

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Fears of a possible transition from China’s asset market woes also fueled the search for safer assets, and the riskier Australian and New Zealand dollars fell.

The dollar eased slightly to 112.83 yen, threatening to revert to Tuesday’s low of 112.73, last seen on October 11.

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The dollar index, which measures the greenback against six rivals, was back at 94.053, having briefly reached 94.634 on Friday after descending from a more than a year’s peak.

The euro fell 0.13% to $1.15805, but held on to most of the three-day gains, which brought it closer to a month’s high of $1.16165.

US Consumer Price Index data for October will be released later in the Global Day. Economists polled by Businesshala expect the October index to rise 0.4%, sharper than a 0.2% increase in the previous month, the main measure rising 0.3 percentage points year-on-year to 4.3%, which the Fed above the annual average. 2% inflation target.

Global inflation readings are under close scrutiny for evidence of whether rising price pressures are accelerating or showing signs of subsidence, with policymakers at the Fed and elsewhere still largely in the view that The current high prices will be fleeting.

“For the dollar index to exit the top of the 94.50 range, we would need to see a 0.8% month-on-month print,” Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client. pay attention.

Although the dollar is trading lower against the yen, “if the US CPI warms it poses a risk to the USDJPY shorts,” he wrote.

China’s October factory gate prices rose at the fastest pace since 1995, lowering forecasts and further profit margins for producers battling rising coal prices and other commodity costs.

Tuesday’s data showed a solid rise in U.S. producer prices in October, indicating that high inflation could persist amid tight supply chains related to the pandemic.

US Treasury real yields fell sharply as traders hedged Treasury Inflation Protected Securities (TIPS) against the prospect of rising prices.

Fed officials said on Tuesday that it was unclear whether higher inflation would freeze further than expected.

San Francisco Fed Chair Mary Daly said it would be in the middle of 2022 before there was more clarity on the employment and inflation outlook. Minneapolis Fed Chairman Neil Kashkari said he believes the forces that keep people out of the labor market and raise prices will be temporary.

Meanwhile, US President Joe Biden met with Fed Governor Lyle Brainard as the potential next Fed chair. He would be considered a dovish pick.

“The potential nomination of Brainard as Fed chair is on[dollars],” Westpac strategists wrote in a research note.

“Otherwise, the underlying picture remains USD supportive,” he said, “and a decline in the dollar index to mid-93 is a buying opportunity,” he said.

After the Bank of England’s surprise decision to keep rates unchanged last week, sterling has held steady this week and was last bought at $1,35495, up from Friday’s one-month low of $1.3425.

The Australian team fell 0.33% to $0.7355 and reached $0.73545 for the first time since 13 October.

New Zealand’s kiwi fell 0.36% to $0.7104.

Contagion concerns have risen again in China’s ailing asset sector, with the Fed sending out its first direct warning about potential global damage.

Evergrande faces a deadline Wednesday to pay off an offshore bond, and Cassa Group pleaded Tuesday for help paying off debt, workers and suppliers.

In cryptocurrency, bitcoin fell below the all-time high of $68,564.40 marked on Tuesday, last changing hands around $66,500.

Ether was trading at $4,712.92, also seen on Tuesday’s record high of $4,842.65.

Reporting by Kevin Buckland; Editing by Sam Holmes, Gerry Doyle and Simon Cameron-Moore

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