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By Ankur Banerjee
SINGAPORE, Oct 14 (Reuters) – The dollar took a breather on Friday after a volatile overnight session as red-hot U.S. inflation data pointed to more aggressive interest rate hikes, while traders were on edge about intervention as the yen wallowed near a three-decade low.
The dollar index =USD was little changed after falling 0.5% in the previous session as investors digested data that showed U.S. consumer prices increased more than expected in September.
The temporary fall in the dollar was partly driven by the sharp recovery in Wall Street stocks, Commonwealth Bank of Australia strategist Carol Kong said.
Wall Street indexes made a dramatic recovery, closing sharply higher after an earlier sell-off on Thursday as investors rushed back into riskier bets.
However, the investment mood remained broadly cautious, which is likely to continue to support the dollar.
“I doubt the weaker dollar will sustain … the dollar is the safe-haven currency currently,” Kong said.
Focus now shifts to next month’s Federal Reserve policy meeting where the it is expected to deliver another 75-basis-point (bps) rate increase.
The dollar was trading at 147.43 to the yen JPY=EBS, not far off from the 32-year peak of 147.665 it hit in the previous session.
Investors remained on the watch for an intervention from the government to prop up the fragile currency. Japanese Finance Minister Shunichi Suzuki reiterated the government’s readiness to take “appropriate action” against excessive currency volatility.
Last month, Japan intervened to buy yen for the first time since 1998, in an attempt to shore up the battered currency.
Rodrigo Catril, a currency strategist at National Bank of Australia, said any intervention from here will be about the speed of depreciation rather than a specific level.
Meanwhile, sterling GBP= last traded at $1.1309, down 0.18% on the day, reversing earlier steep gains against the dollar following reports of a possible U-turn by the UK government on its fiscal plans.
The Australian dollar was up 0.22% versus the greenback at $0.631, coming off two and half year low it touched in the previous session.
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Currency bid prices at 0136 GMT
Description
RIC
Last
U.S. Close Previous Session
Pct Change
YTD Pct Change
High Bid
Low Bid
Euro/Dollar
EUR=EBS
$0.9773
$0.9778
-0.05%
-14.03%
+0.9778
+0.9763
Dollar/Yen
JPY=EBS
147.2750
147.3100
-0.04%
+28.02%
+147.4400
+147.2500
Euro/Yen
EURJPY=EBS
143.95
143.95
+0.00%
+10.46%
+144.0500
+143.8400
Dollar/Swiss
CHF=EBS
1.0008
1.0014
-0.09%
+9.69%
+1.0019
+1.0005
Sterling/Dollar
GBP=D3
1.1309
1.1332
-0.17%
-16.35%
+1.1332
+1.1293
Dollar/Canadian
CAD=D3
1.3754
1.3752
+0.01%
+8.78%
+1.3769
+1.3745
Aussie/Dollar
AUD=D3
0.6306
0.6298
+0.13%
-13.24%
+0.6314
+0.6290
NZ Dollar/Dollar
NZD=D3
0.5649
0.5640
+0.25%
-17.39%
+0.5661
+0.5635
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
World FX rateshttps://tmsnrt.rs/2RBWI5E
(Reporting by Ankur Banerjee in Singapore; Editing by Sam Holmes)
(([email protected];; Mobile – +65 9121 9485; Twitter: @AnkurBanerjee17;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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