Dollar Up, but Fed Asset Tapering Move Guessing Game Keeps Moves Small

The dollar was up on Wednesday morning in Asia but was trading near its lowest point in nearly three weeks. Investors continued to keep moves small, with the latest U.S. jobs report, which could provide clues to the U.S. Federal Reserve’s asset tapering timeline, due on Friday. The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.10% to 92.730 by 11:25 PM ET (3:25 AM GMT). It fell as low as 92.395 for the first time since Aug. 6 on Tuesday. The USD/JPY pair edged up 0.16% to 110.19. The AUD/USD pair inched down 0.01% to 0.7314. The Australian GDP grew 9.6% year-on-year and 0.7% quarter-on-quarter in the second quarter of 2021.The NZD/USD pair inched down 0.06% to 0.7040. The USD/CNY pair inched up 0.04% to 6.4633, with China’s Caixin manufacturing purchasing managers index (PMI), at a disappointing 49.2 in August, below the 50-mark indicating growth. The GBP/USD pair edged down 0.11% to 1.3739. After climbing to a nine-and-a-half month high of 93.734 on Aug. 20, the greenback has since been on a downward trend as some Fed officials suggested that asset tapering would not begin imminently. While Fed Chairman Jerome Powell said that asset tapering could begin in 2021 at the previous week’s Jackson Hole symposium, he did not provide a concrete timetable. Cleveland Fed President Loretta Mester also said on Monday that she was not yet convinced that recent inflation data satisfied the central bank’s price stability goal. On the data front, the U.S. Conference Board (CB) consumer confidence index was 113.8, a six-month low, while the S&P/Case-Shiller 20 n.s.a. house price index composite grew a record 19.1% in June. With labor market recovery one of the Fed’s conditions to begin asset tapering, investors will be paying attention to the latest U.S. jobs report that includes non-farm payrolls, due out of Friday. “The dollar uptrend is over for the time being at least,” after Powell successfully separated the debate over taper timing from any decisions about higher rates, National Australia Bank head of foreign exchange strategy Ray Attrill said in a note. “Positive price action” in the Australian and New Zealand dollars since their Aug. 20 lows suggests “a base has now been formed for both currencies,” the note added.
Market analytics

Other news

Nokia’s third quarter profit beats expectation
HELSINKI (Reuters) -Telecom equipment maker Nokia (NYSE:NOK) reported stronger-than-expected third-quarter operating profits on Thursday as development investments, strategy updates and cost cuts continued to drive a turnaround in the business. Third-quarter net sales rose 2% to 5.4 billion euros ($6.27 billion) from 5.3 billion a year ago, in line with analyst expectations. “The third quarter […]
Dollar Edges Higher; ECB Next as Central Bankers Meet
By Peter Nurse – The dollar edged higher in early European hours Thursday, with policy decisions by central bankers in Australia, Japan and Europe jolting trading. At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 93.835, with movements seen […]
Dollar Down, but Near Year High as Investors Await Fed’s…
The dollar was down on Wednesday morning in Asia but held near a one-year high amid rising speculation that the U.S. Federal Reserve will announce the beginning of asset tapering in November 2021, followed by potential interest rate hikes by the middle of 2022. The U.S. Dollar Index that tracks the greenback against a basket of other […]
Pound Vulnerable to Stagflation Clutches as Brexit Impact Emerges
The pound is unlikely to be rescued by the increasing odds of a Bank of England rate hike as the currency may struggle to escape the clutches of stagflation just as the impact of Brexit begins to emerge.  GBP/USD was flat at $1.3594. “GBP’s fall from grace has been swift. Stagflation is the current buzzword which […]
Dollar Rally Faces ‘Critical Resistance,’ But Bulls Will Hold The…
The dollar is approaching ‘critical resistance’ that may force some to take profit, but this isn’t the time to turn bearish as any dips will likely be bought paving the way for further upside, experts say. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose 0.22% to 93.99. […]
Dollar climbs as energy surge drives inflation worries
The dollar edged higher on Wednesday amid nervousness that surging energy prices could spur inflation and interest rate hikes, and as traders awaited U.S. jobs data for clues on the timing of Federal Reserve policy tightening. The Reserve Bank of New Zealand lifted its official cash rate for the first time in seven years but […]