SINGAPORE: The US dollar was stable on Wednesday, with investors on their toes before the release of the minutes of the Federal Reserve’s latest policy meeting, which could offer clues about the inflation outlook and the pace of interest rate hikes.
The dollar index, which measures the currency against a basket of six counterparts including the yen, euro and pound, last traded at 107.110, after slipping 0.65% overnight .
Carol Kong, currency strategist at the Commonwealth Bank of Australia, said Tuesday’s move reflected improved risk appetite, with stocks and bonds rising on the back of better corporate earnings and expectations of slower rate hikes from the central bank .
The kiwi moved higher after New Zealand’s central bank raised interest rates by 75 basis points to a nearly 14-year high of 4.25% and said the cash rate needed to rise faster than previously indicated .
The New Zealand currency hit a three-month high of $0.6207, and rose 0.47% to $0.6173. The central bank also warned that the economy could have to spend a full year in a recession to keep inflation in check.
In China, a spike in COVID-19 cases has dashed hopes of a speedy reopening of the world’s second-largest economy.
Shanghai abruptly canceled an auto industry event on Wednesday, while the city of Chengdu plans to conduct mass tests for residents for five consecutive days.
“The imposition of new restrictions in the short term will undoubtedly have a negative economic impact, but at least for now the market seems to focus on the fact that in the medium term, China is trying to gradually move towards a strategy of coexistence with COVID,” he said Rodrigo Catril, currency strategist at National Australia Bank.
“That said, we believe setbacks are very likely in this process, so we should expect spikes in market volatility along the way.”
The euro was up 0.11% to $1.0313, after gaining 0.6% overnight, while the pound last traded at $1.1874, down 0.08 % during the day.
The Australian dollar fell 0.15% to $0.664.
Cryptocurrencies have remained volatile, with bitcoin fluctuating between losses and gains. The latest rose 1.79% to $16,477.
Offer prices in currency at 05:00 GMT
Description RIC Ultima US Close Pct Change YTD Pct High Bid Low Bid
Euro/Dollar $1.0316 $1.0303 +0.14 percent +0.00 percent +1.0325 +1.0301
Dollar/Yen 141.4450 141.2250 +0.18 percent +0.00 percent +141.4950 +140.9800
Euro/Yen 145.92 145.50 +0.29 per cent +0.00 per cent +145.9200 +145.4100
Dollar/Swiss 0.9518 0.9515 +0.03 percent +0.00 percent +0.9520 +0.9507
Pound/Dollar 1.1875 1.1886 -0.11 per cent +0.00 per cent +1.1908 +1.1873
Dollar/Canadian 1.3387 1.3373 +0.11 percent +0.00 percent +1.3390 +1.3357
Aussie/Dollar 0.6638 0.6650 -0.17 per cent +0.00 per cent +0.6659 +0.6635
NZ 0.6158 0.6155 +0.08 per cent +0.00 per cent +0.6193 +0.6121
spots of Europe
Information on the Tokyo Forex market from the BOJ