TOKYO/LONDON, Oct 10 (Reuters) – The dollar rose to a 10-week high against the yen on Thursday, after markets weighed the U.S. Federal Reserve’s bid for further monetary easing despite major inflation. )’s patient approach. Reports were forthcoming later in the day.
The dollar index against six major rival currencies, including the yen, hovered near near two-month highs overnight as last week’s unexpectedly strong jobs report led traders to further reduce bets on U.S. interest rate cuts this year. It remained at .
The US currency hit 149.54 yen for the first time since Aug. 2, but was last down 0.3% at 148.82 yen. Meanwhile, the euro languished against the dollar, near its lowest level since August 13, and was flat on the day at $1.0936.
According to a survey of economists conducted by Reuters, the consumer price index (CPI) for September, which will be released at 1230 GMT (1:30 p.m. Japan time), shows that the US core inflation rate is stable at 3.2% year-on-year. He expressed the view that there is a high possibility that the situation will change.
Minutes from the Fed’s latest meeting, released overnight, confirmed the central bank’s focus on maintaining the health of the labor market.”The argument for a more gradualist approach is definitely taking center stage right now,” said Alvin Tan, head of Asia currency strategy at RBC Capital Markets.
“Market momentum is in the direction of the Fed reconsidering how much it will actually cut interest rates in the coming months.Recently, U.S. data flows have been relatively good, so we think that momentum could increase. think.”
San Francisco Fed President Mary Daly said late Wednesday that she was now more concerned about the hit to the labor market than a resurgence in inflation.
According to CME Group’s FedWatch tool, traders have an 85% chance that the Fed will cut interest rates by 25 basis points in its next policy decision on Nov. 7, with a 15% chance of keeping rates unchanged.
A week ago, the market was betting on a rate cut, with a 35% chance of another 0.5 point cut.
The dollar index was little changed at 102.88 at 1045 GMT, near its highest level since mid-August.
Joseph Capurso, head of international and sustainable economics at the Commonwealth Bank of Australia, said: “Without strong guidance from FOMC officials, there are limits to how far we can eliminate pricing in further interest rate cuts.” ” and predicted as follows. The FOMC will cut interest rates by 50 basis points in the remaining two meetings of the year.
The risk-sensitive Australian dollar rose 0.1% to US$0.6724. It had previously risen more than 0.3% on the back of rising stock prices in China, its largest trading partner, after the East Asian country’s central bank launched a swap program aimed at supporting its stock market.
China’s Ministry of Finance is scheduled to hold a much-awaited press conference on fiscal policy on Saturday.
The Australian dollar fell to $0.6708 on Wednesday, its lowest since September 16, after China’s state policymakers announced a failed stimulus package.
RBC’s Tan said he expected China to announce fiscal stimulus on Saturday “sufficient to create support for the Chinese economy.”
He said the stimulus would likely support the Chinese yuan, which has weakened in recent days, and boost other Asian currencies such as the Singapore dollar and Indonesian rupiah.
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Reporting by Kevin Buckland and Harry Robertson. Editing: Clarence Fernandez, Sharon Singleton, Ross Russell
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