* Graphic: World FX rates tmsnrt.rs/2RBWI5E
By Hideyuki Sano
TOKYO, June 8 (Reuters) - The U.S. dollar found support on
Tuesday as investors looked to U.S. inflation data due later in
the week after softer-than-expected jobs data eased but did not
dispel concerns about early tapering of the Federal Reserve"s
monetary stimulus.
The euro fetched $1.2178, a bounce back from a
three-week low of $1.2104 set on Friday, but slightly below its
20-day moving average. The dollar also crept back through its
20-DMA against the yen, and rose 0.15% to 109.42 yen.
The dollar"s index against a basket of six major currencies
stood at 90.059, not far from 89.533, a 4 1/2-month low
touched late last month. It has been idling around there while
investors try and gauge the U.S. recovery and policy response.
"Worries remain that the Fed may start discussing tapering
asset purchases at next week"s FOMC meeting," said Philip Wee,
an FX strategist at Singapore"s DBS Bank. "More so after U.S.
Treasury Secretary Janet Yellen"s comment that higher U.S.
interest rates would be good for the economy," he added.
Yellen said slightly higher rates "would actually be a plus
for society"s point of view and the Fed"s point of view," during
a weekend interview with Bloomberg.
Still, Friday"s jobs data, which showed U.S. non-farm
payrolls increasing by 559,000 in May, came in below
expectations and eased concern about the Fed acting soon.
"It"s not that the payrolls numbers were weak. But because
so much expectation had been built up in advance, the dollar
suffered a bit of setback," said Shinichiro Kadota, senior
currency strategist at Barclays.
The data helped to pin down U.S. bond yields near their
recent lows, weighing on the dollar, while investors now looked
to consumer price data on Thursday for fresh direction. But
nerves about strong readings, which could boost the case for
tapering, are also giving the dollar some underlying support.
Many investors now expect the Fed to unveil a plan to reduce
its bond purchase later this year, and actual tapering to start
early next year.
The British pound fell 0.1% to $1.4157 and the
Australian dollar eased slightly to $0.77444, even
though both stuck in ranges seen over the past couple of months.
With recent trading channels tight, implied volatilities on
both currencies have dropped to their lowest levels since early
2020, before markets were pummelled by the COVID-19 pandemic.
Elsewhere, the Mexican peso held firm at 19.835 to the U.S.
dollar, near its highest level since late January,
after midterm elections confirmed President Andres Manuel Lopez
Obrador"s MORENA party as the strongest force in the country,
but with a reduced majority.
In contrast, the Peruvian sol tumbled to an all-time low of
3.9367 per dollar as socialist Pedro Castillo edged ahead
of right-wing rival Keiko Fujimori in the country"s presidential
election vote.
Cryptocurrencies were also heavy. Bitcoin eased 2% to a
three-week low of $32,418, while ether fell 4% to a
one-week low of $2,431.93.
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Currency bid prices at 432 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.2178 $1.2190 -0.09% -0.32% +1.2194 +1.2178
Dollar/Yen 109.4150 109.2600 +0.15% +5.94% +109.4350 +109.2100
Euro/Yen
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