By Tom Westbrook
SINGAPORE, Aug 31 (Reuters) - The euro stood at a
15-year high on the yen on Thursday on signs of sticky inflation
in Europe, while the dollar was squeezed ahead of consumption,
inflation and jobs data that could add to evidence of a
softening economy.
Annual inflation in Germany and Spain barely slowed in
August, against expectations, data on Wednesday showed.
Traders figured it increased chances of a rate hike in
Europe next month to about 50-50, and bought the euro
which rose 0.4% to $1.0923.
It was steady in early Asia trade and is now up three
sessions in a row on the dollar and five straight sessions on
the yen, where it hit a 15-year top at 159.76 yen.
Sterling also rose along with the euro, and was
last holding gains at $1.2713.
China PMI data is expected to come in soft later in the day,
keeping the yuan little changed in early offshore
trade.
Europe-wide inflation data is also due later on Thursday, as
is U.S. personal consumption data and core PCE - which is the
Federal Reserve's favoured inflation gauge.
U.S. payrolls data is due on Friday, and the dollar has been
under pressure as second-tier figures this week such as job
openings and private payrolls have pointed to softness.
Overnight the Commerce Department revised down
second-quarter growth to 2.1% from an estimate of 2.4%.
The dollar index, while still up more than 1% for
August, has fallen 1% for the week so far as traders reckon U.S.
interest rates may have stopped rising - even if they stay high.
"Market expectations that Fed rates have plateaued are
continuing to creep higher," said analysts at ANZ Bank.
Two-year Treasury yields are down about 17 basis
points (bps) to 4.888% this week and Fed funds futures
imply about a 40% chance of a hike by year-end, compared with
about 55% at the start of the week.
Ten-year yields are down 12 bps to 4.1139%.
The Antipodean currencies made a round trip on the dollar
overnight, unable to hold gains ahead of likely soft Chinese
data, and as hikes might also be done in Australia and New
Zealand.
After briefly poking above $0.60, the New Zealand dollar
traded at $0.5953 on Thursday, while the Aussie
was firm at $0.6418. Both have been hit hard by fears
of a deepening malaise in China's economy, and are set for their
worst monthly drops since February, with falls larger than 3.5%.
The yen has been another weak performer this
month, dropping 2.6% on the dollar as investors figure interest
rates are likely to stay low in Japan and high in the United
States.
It has been steadying with traders wary of the risk of
official intervention, and was last at 146.07 per dollar.
========================================================
Currency bid prices at 0017 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar
$1.0930 $1.0924 +0.05% +1.99% +1.0932 +1.0917
Dollar/Yen
146.0600 146.2650 -0.13% +0.00% +146.1600 +146.0150
Euro/Yen 159.65 159.74 -0.06% +13.79% +159.7300 +159.5300
Dollar/Swiss
0.8780 0.8785 -0.02% -5.01% +0.8784 +0.8784
Sterling/Dollar
1.2715 1.2719 -0.02% +5.15% +1.2722 +1.2711
Dollar/Canadian
1.3532 1.3534 +0.02% -0.10% +1.3537 +1.3536
Aussie/Dollar
0.6483 0.6476 +0.13% -4.88% +0.6484 +0.6472
NZ
Dollar/Dollar 0.5955 0.5956 +0.00% -6.21% +0.5959 +0.5945
All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Tom Westbrook
Editing by Shri Navaratnam)
Euro jumps on inflation while dollar braces for jobs
August 30, 2023 at 08:27 pm
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