The euro held even versus the dollar on Tuesday. Most currency pairs were held as traders anticipated U.S. inflation data later in the week and more talks from central bank governors for some hints on the direction of interest rates.
Following central banks tried to push back versus rising rate hike expectations last week, sending the euro and the pound falling, currency markets have settled back into another spell of low volatility.
The euro held at $1.1587, fixed on the day, and the dollar index at 94.001, also a little moved.
Adam Cole, the currency analyst at RBC Capital Markets, continues constructive on the dollar. That is based on a completely vanilla nominal rates story stated on his forecast that the divergence in rate expectations with the U.S. would soon contract, boosting the dollar.
He said they would get a better direction when they get to the U.S. CPI, referring to data expected on Wednesday.
The data is supposed to show that U.S. consumer prices galloped, and Chinese factory gate prices rose in October.
Inflation data awaited
Ahead of the inflation data, a slew of central bankers should speak later on Tuesday, including European Central Bank President Christine Lagarde at 1300 GMT and Fed chair Jerome Powell at 1400 GMT.
The yen repeatedly increased to a one-month high versus the dollar following hitting a four-year low last month. The yen was closing at 112.97 per dollar, leaving the dollar down 0.2% on the day.
Sterling, beaten last week in the wake of the Bank of England shock to keep rates on hold, was closing at $1.3558, flat on the day but still some way off a low of $1.3425 hit on Friday.
The Norwegian crown steadied at $0.7163 following jumping on Monday. It drew support from traders wary of the opportunity that the Reserve Bank of New Zealand could increase rates by as much as 50 basis points (BPS) later this month.
ANZ analysts said in a note that if the RBNZ is of a mind to increase by 50bps, now’s the time.
That still appears incompatible with the dubious global backdrop and cautious tone of other central banks. However, until we know the result, markets will price in the risk.
On Tuesday, the risk-sensitive Australian dollar endured most of its profits made overnight to trade at $0.7422.
Bitcoin surged to a record $68,564 in Asia trade, drawing ether with it to a record $4,800. The bitcoin value was last at $68,038.
