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FOREX-Dollar subdued, on course for weekly gain before Fed meeting


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* Dollar set for 0.5% rise this week

* Yen up 0.1%, Aussie off 0.3%

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

TOKYO, June 14 (Reuters) - The dollar trod water on Fridayand was set to show a weekly rise as investor focus turned tonext week's Federal Reserve meeting for hints on a possible ratecut in light of rising risks to trade and global growth.

The dollar index against a basket of six rivals was largelyunchanged at 97.029 .DXY , and on track for a half-percent gainthis week. The index had touched an 11-week low of 96.459 lastFriday.

The Federal Open Market Committee's (FOMC) two-day policymeeting is set to begin on Tuesday. With trade tensions rising,U.S. growth slowing and hiring in May declining, markets havepriced in at least two rate cuts by the end of 2019.

There was only a 13.4% expectation on Thursday that U.S.interest rates will be at current levels in July of this year,compared to 74.1% a month ago, according to the CME Group'sFedWatch tool.

"Ahead of the FOMC meeting, people are expecting dovishcomments from the Fed, which is weighing on the dollar ingeneral," said Masafumi Yamamoto, chief currency strategist atMizuho Securities.

"However, other currencies like euro and sterling are weakand their weakness is helping the strength of the dollar," hesaid.

Investors' attention on Friday will also be on U.S. retailsales data due later in the global day for insights into thestate of domestic demand in the world's biggest economy.

Market participants were also keeping a close eye ongeopolitical issues including the months-long Sino-U.S. tradeconflict and U.S.-Iran tensions following Thursday's attacks ontankers in the Gulf of Oman. Washington quickly blamed Iran forthe attacks, but Tehran denied it was responsible. urn:newsml:reuters.com:*:nL4N23K1S2

Geopolitical risks have risen to the fore quite strongly,said Bart Wakabayashi, Tokyo branch manager at State StreetBank.

"The anticipation was for a relatively quick, undisruptiveresolution to the trade situation with China. Obviously, thathasn't happened," said Wakabayashi.

The greenback dipped 0.1% to 108.30 yenJPY= .

The Japanese currency showed little reaction to the latestround of trade negotiations between Tokyo and Washington onThursday.

Japan and the United States deepened their understandingover each other's position on trade and will continuediscussions, Japan's economy minister Toshimitsu Motegi saidafter meeting with U.S. Trade Representative RobertLighthizer. urn:newsml:reuters.com:*:nL4N23K4Q6

Motegi said the two would probably meet again ahead of theG20 summit meeting in Osaka, Japan late this month.

The Australian dollar AUD=D4 slipped as investors bet thataggressive rate cuts would be needed to support the economy inthe wake of soft domestic data and the fallout from theU.S.-China trade standoff globally.

"The perception of an Aussie rate cut is gaining steam,"said Wakabayashi.

The Aussie was last down 0.3% at $0.6896, and on course fora loss of about 1.5% for the week.

Elsewhere, the euro EUR= edged up 0.02% to $1.1279,holding up after falling during the past two sessions, though itwas still set for a weekly loss of about 0.5%.

Oil fell on Friday after sharp gains in the previous sessionwhen prices were boosted following the attacks on two tankersnear Iran and the Strait of Hormuz, a key passage for seaborneoil cargoes. urn:newsml:reuters.com:*:nL4N23L05VO/R

Mizuho's Yamamoto said rising oil prices could create a dragon the dollar, adding that higher crude prices were notnecessarily bad for the global economy. (Editing by Simon Cameron-Moore & Shri Navaratnam) ((daniel.leussink@thomsonreuters.com; Twitter: @danielleussink;+81-3-6441-1825; Reuters Messaging:daniel.leussink.thomsonreuters.com@reuters.net))






This article appears in: Politics , Stocks , World Markets
Referenced Symbols: EUR



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