By Rae Wee
SINGAPORE, Feb 23 (Reuters) - The dollar ceded some
ground on Thursday as markets warmed up to the idea the Federal
Reserve is likely to stay on its aggressive rate-hike path,
after minutes from its last policy meeting reinforced the
central bank's hawkish rhetoric.
Nearly all Fed policymakers favoured a scale down in the
pace of interest rate hikes at the U.S. central bank's last
policy meeting, minutes from the Jan. 31-Feb. 1 FOMC meeting
showed on Wednesday.
However, they also indicated curbing unacceptably high
inflation would be the "key factor" in how much further rates
need to rise.
The dollar retreated from its multi-week highs against some
of its major peers in Asia trade, after a broad gain in the
previous session, following the release of the minutes.
The euro rose 0.13% to $1.0618, away from its
roughly seven-week trough of $1.0598 hit in the previous
session.
The Aussie gained 0.26% to $0.6823, having
similarly slid to a near seven-week low of $0.6795 on Wednesday,
further pressured by a miss in forecasts for Australian wage
growth last quarter.
Trading was thinned on Thursday with markets in Japan closed
for a holiday.
"Many central banks around the world ... are trying to put
an emphasis in their determination to combat inflation
expectations," said Christopher Wong, a currency strategist at
OCBC.
"The higher-for-longer thematic may continue to
undermine sentiment."
Elsewhere, sterling gained 0.07% to $1.2053
after a 0.6% slide in the previous session, while the New
Zealand dollar rose 0.29% to $0.6238.
The kiwi continued to draw some support from the Reserve
Bank of New Zealand's hawkish rate rise on Wednesday, after the
central bank signalled further tightening ahead to tame high
inflation.
Against a basket of currencies, the U.S. dollar index slipped 0.12% to 104.40, though was not far from its over
one-month peak of 104.67 hit last week.
"The easy part of the short USD trade is over," said Galvin
Chia, emerging markets strategist at NatWest Markets.
"Until major releases can change the view, the market bias
looks like 'good news is bad news' - a resilient U.S. economy is
risk-negative."
In Asia, the Japanese yen edged higher to 134.81
per dollar, with attention now on incoming Bank of Japan (BOJ)
Governor Kazuo Ueda's speeches.
Ueda will speak in parliament on Friday and next Monday,
with investors looking for clues on how soon the BOJ could end
its bond yield control policy.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Rae Wee; Editing by Lincoln Feast)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.