By Rae Wee
SINGAPORE, Jan 30 (Reuters) - The dollar firmed on
Monday and distanced itself from an eight-month trough ahead of
a slew of central bank meetings this week, including the Federal
Reserve's, with traders keenly focused on guidance for the path
of interest rate rises.
The U.S. dollar index , which measures the greenback
against a basket of currencies, rose 0.03% to 101.92, edging
away from last week's eight-month low of 101.50.
However, it remained on track for a fourth straight monthly
loss of 1.5%, pressured downward by expectations that the Fed
was nearing the end of its rate-hike cycle and that interest
rates would not have to rise as high as previously feared.
Sterling was up 0.01% at $1.24005, while the kiwi edged 0.09% higher to $0.6500.
Moves were subdued ahead of policy meetings from the Fed,
the European Central Bank (ECB) and the Bank of England (BoE)
later this week.
"We will range trade a little bit as the market tries to
assess how the central banks behave .... I think, for all three
it's going to be more about what they say than what they do,"
said Rodrigo Catril, a currency strategist at National Australia
Bank (NAB).
The Fed is widely expected to deliver a 25 basis point rate
hike, while the ECB and the BoE are likely to raise rates by
50bp each.
The euro was last 0.03% higher at $1.08705 and was
on track for a monthly gain of nearly 1.5%, marking its fourth
straight month of increases.
The single currency has got support from continued hawkish
rhetoric by ECB policymakers and ebbing fears of a deep
recession in the euro zone.
Elsewhere, the Aussie rose 0.11% to $0.71175, while
the Japanese yen slipped marginally to 129.94 per
dollar.
Core consumer prices in Japan's capital for the month of
January marked the fastest annual gain in nearly 42 years, data
on Friday showed, keeping the Bank of Japan under pressure to
phase out its economic stimulus.
With China returning from its Lunar New Year holiday, focus
will be on the upcoming release of its purchasing managers'
index (PMI) data on Tuesday.
"The market will be looking ... hopefully not to get
disappointed," said NAB's Catril.
"So far, the data coming from China, or the vibes coming
from China, do play to the view that a good reopening in terms
of activity is likely to unfold."
Lunar New Year holiday trips inside China surged 74% from
last year after authorities scrapped COVID-19 travel curbs,
state media reported on Saturday.
The offshore yuan was last more than 0.1% higher,
at 6.7465 per dollar.
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(Reporting by Rae Wee; Editing by Bradley Perrett)
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