FOREX-Dollar gains as yields hold near recent highs before ECB meeting

  • 9/8/2021
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(Adds quotes, rewrites throughout, updates prices) * Graphic: World FX rates tmsnrt.rs/2RBWI5E By Karen Brettell NEW YORK, Sept 8 (Reuters) - The dollar hit a one-week high against peers on Wednesday as U.S. Treasury yields held near the upper end of their recent range and as the euro weakened a day ahead of a European Central Bank policy decision. The dollar index, which measures the currency against six rivals, gained 0.18% to 92.70, the highest since Sept. 1. "We"ve seen the dollar move in lockstep higher with U.S. yields since markets have returned from the Labor Day holiday. The focus now turns to key central bank meetings - with the ECB tomorrow and the Fed later this month," said Viraj Patel, global FX and macro strategist at Vanda Research. The benchmark 10-year Treasury note yield has risen since data on Friday showed that U.S. jobs growth slowed while wage inflation was higher than expected. The yields were last at 1.35%, up around 5 basis points from before Friday"s data. An uptick in inflation is complicating the picture for Federal Reserve officials who want to see further progress in employment before reducing bond purchases. “At its very worst, there is some concern that nominal wages are still lagging consumer price increases by cycle extremes ... and that nominal wages are struggling to keep up with prices, which is how a wage-price spiral develops,” Alan Ruskin, a macro strategist at Deutsche Bank, said in a report on Tuesday. Investors will look to a speech by New York Fed President John Williams later on Wednesday for any new hints on when a policy change is likely, with many analysts still expecting a taper to be announced later this year. The euro dipped before the European Central Bank meeting set for Thursday. The ECB could tighten policy sooner than many anticipate as inflationary pressures could prove to be persistent, ECB policymaker Robert Holzmann said in a contribution to Eurofi Magazine on Wednesday. Analysts polled by Reuters see PEPP purchases falling possibly as low as 60 billion euros a month from the current 80 billion, before a further fall early next year and the scheme"s end in March. The single currency was last down 0.25% on the day at $1.1812, the lowest since Sept. 1. The greenback also gained 0.23% against Canada"s loonie before the Bank of Canada"s scheduled meeting on Wednesday. Meanwhile, cryptocurrencies struggled to rebound from hefty losses from Tuesday, when El Salvador became the first country to adopt bitcoin as legal tender and several trading platforms said they experienced performance issues. Bitcoin dipped 0.65% to $46,576 after sinking as low as $42,900 on Tuesday. Earlier that day it had touched an almost four-month high of $52,956. ======================================================== Currency bid prices at 9:42AM (1342 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 92.7070 92.5360 +0.20% 3.030% +92.7360 +92.4720 Euro/Dollar $1.1812 $1.1842 -0.25% -3.32% +$1.1851 +$1.1811 Dollar/Yen 110.2950 110.2850 -0.06% +6.71% +110.4450 +110.1500 Euro/Yen 130.30 130.62 -0.24% +2.66% +130.6900 +130.1800 Dollar/Swiss 0.9217 0.9196 +0.23% +4.18% +0.9220 +0.9186 Sterling/Dollar $1.3755 $1.3783 -0.19% +0.70% +$1.3790 +$1.3751 Dollar/Canadian 1.2678 1.2648 +0.23% -0.45% +1.2706 +1.2627 Aussie/Dollar $0.7370 $0.7389 -0.24% -4.18% +$0.7404 +$0.7350 Euro/Swiss 1.0888 1.0887 +0.01% +0.75% +1.0894 +1.0866 Euro/Sterling 0.8587 0.8590 -0.03% -3.92% +0.8602 +0.8580 NZ $0.7100 $0.7100 +0.04% -1.09% +$0.7115 +$0.7081 Dollar/Dollar Dollar/Norway 8.6935 8.6830 +0.01% +1.13% +8.7315 +8.6840 Euro/Norway 10.2711 10.2860 -0.14% -1.87% +10.3218 +10.2620 Dollar/Sweden 8.6103 8.5827 +0.02% +5.05% +8.6290 +8.5848 Euro/Sweden 10.1698 10.1679 +0.02% +0.93% +10.1988 +10.1670 (Additional reporting by Ritvik Carvalho in London; editing by Mark Heinrich) Our Standards: The Thomson Reuters Trust Principles.

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