Dollar extends post-payrolls dip; kiwi leaps on rate hike view
The dollar drifted lower on Tuesday and the kiwi rose most among other majors as investors brought forward rate hike expectations for New Zealand, following a strong business survey, while pressure for U.S. hikes eased in the wake of mixed jobs data.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.04 — off levels above 92.4 seen late last week.
Sterling rose 0.3% to a one-week high of $1.3888 as markets looked forward to England becoming the first major country to formally start living with the coronavirus by dropping COVID-related curbs in a fortnight’s time.
The euro ticked 0.1% higher to $1.1872 and the yen rose by about the same margin to 110.83 per dollar. The New Zealand dollar jumped as much as 0.8% to $0.7035.
The Aussie rose 0.5% to $0.7563 but was largely unmoved by the Reserve Bank of Australia holding rates and paring its bond purchases - all mostly as expected.
The moves extended a dip in the dollar since U.S. labour market data last week that was upbeat but not so strong as to risk bringing forward the day when the Federal Reserve might start tapering its asset buying.
· Yuan ticks higher, investors await Fed minutes, China inflation data
China's yuan ticked higher against the dollar on Tuesday on a firmer official guidance, with investors awaiting minutes from the Federal Reserve's last policy meeting and China's June inflation data before betting on the currency's move.
Traders said the two events could bring some volatility to the yuan trading as the Fed minutes due on Wednesday could offer more details on U.S. policymakers' thinking over the timing to pare back stimulus, while China's consumer inflation data due out on Friday could influence the People's Bank of China stance on tightening monetary policy.
Prior to market opening, PBOC set the midpoint rate at 6.4613 per dollar, 82 pips or 0.13% firmer than the previous fix of 6.4695.
Reference: CNBC, Reuters
Thai
Eng