Dollar marooned as investors shrug off inflation spike By Reuters

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© Reuters. FILE PHOTO: U.S. dollar bills appear in front of the stock chart shown in this February 8, 2021 illustration. REUTERS / Dado Ruvic / Illustration / File Photo by Tom Westbrook SINGAPORE (Reuters) – After a week of anxious waiting, the markets shrugged their shoulders and moved on – the US dollar was under pressure as well most majors stayed in price ranges. The greenback saw small losses early in the Asia session as traders believed the 0.6% rise in consumer prices last month had enough one-off effects to underpin the Federal Reserve’s insistence on likely temporary inflation. The dollar bought 109.37 yen and was heading for a small weekly loss. It was also on track for modest weekly losses in the dollar and British pound, most recently trading at $ 0.7748 per Aussie and $ 1.4171 per pound. A reluctant pledge from the European Central Bank to maintain its accelerated bond buying pace kept the euro in check at $ 1.2175. “What we see is a market that believes in the Fed,” said Chris Weston, chief research officer at Melbourne broker Pepperstone, as investors curb concerns that the strong US recovery is leading to early rate hikes. “We will rejuvenate,” he said. “But it will make such a snail’s pace.” The overnight data showed that US consumer prices were up 5% year-over-year, the steepest increase in more than a dozen years and core inflation of 0.7% in a month. But hefty contributions from short-term price hikes on airline tickets and used cars helped convince dealers that interest rates weren’t going to rise anytime soon. “It basically fit into the Fed’s script that we were going to have a breakout, but it will only be temporary,” said Imre Speizer, Westpac’s currency analyst. “This report agrees, it doesn’t speak against it. I think the market needed something that spoke against it to drive the US dollar higher.” Following the release of the inflation numbers, the stock fell slightly to last at 90.041, more or less unchanged for the week. Benchmark 10-year US Treasuries actually hit a three-month high in the wake of the CPI as short sellers surrendered and their bets on rising yields stopped. [US/] Focus is now on next week’s Fed meeting, although traders now say there may not be a major shift in rhetoric that has downplayed the need to reduce stimulus. A Reuters poll of economists found that a plan to reduce bond purchases is expected to be announced in August or September but is not expected to begin until next year. Before the onshore trading band was set, it was stable at 6.3853 per dollar offshore. [CNY/] The South Korean won traded firmly after the central bank governor hinted at normalization in an advance copy of a speech due later Friday. Cryptocurrencies appeared to end the week stable, with Bitcoin appearing to be well supported at around $ 35,000 despite more talk of global regulatory control. ================================================ == ==== Currency bid rates around 113 GMT Description RIC Last US closing rate Pkt Change YTD Pkt Highest Bid Low Bid Previous Change Session Euro / Dollar $ 1.2180 $ 1.2176 + 0.03% -0.31% +1.2180 +1.2171 dollars / Yen 109.4100 109.3150 +0.00% + 5.83% +109.4450 +0.00000 Euro / Yen 133.24 133.08 + 0.12% + 4.98% +133.2800 +133.1100 dollars / Switzerland 0, 8943 0.8946 -0.03% + 1.09% +0.8950 +0.8943 pounds sterling / dollar 1.4174 1.4176 -0.02% + 3.74% + 1.4178 +1.4170 dollars / Canadians 1.2088 1.2095 -0.04% -5.06% +1.2098 +1.2090 Aussie / dollar 0.7754 0.7753 + 0.03% + 0.81% +0.7757 +0 .7747 NZ Dollar / Dollar 0.7193 0.7196 -0.04% + 0.17% +0.7999 +0.7188 Spots Tokyo Spots Europe Spots Volatilities Tokyo Forex Market Information from BOJ

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