<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Rae Wee; Editing by Jacqueline Wong)
By Rae Wee
SINGAPORE, April 12 (Reuters) - The U.S. dollar slipped
on Wednesday ahead of a closely-watched inflation reading later
in the day that will provide clues on the path of Federal
Reserve interest rate hikes.
Following last week's solid U.S. jobs data, all eyes are now
on the inflation report, with currency moves subdued ahead of
the release.
Sterling rose 0.04% to $1.2432 while the euro was last 0.1% higher at $1.0924, with both currencies
some distance away from their one-week lows hit on Monday.
Against a basket of currencies, the U.S. dollar index fell 0.05% to 102.07.
"It will be a bit like Friday's nonfarm payrolls, where not
much happens until the data, and when the data comes out, you
get all sorts of reactions," said Joseph Capurso, head of
international and sustainable economics at Commonwealth Bank of
Australia.
A Reuters poll of economists have forecast headline
inflation in March to come in at 5.2% year-on-year, down from
6.0% previously, while core inflation likely ticked higher to
5.6%.
"Powell has said numerous times he wants to see a downtrend
in underlying inflation, but the data's not providing that yet.
That's why tonight is so important," Capurso said, referring to
Fed Chair Jerome Powell.
A raft of Fed speakers on Tuesday offered little guidance on
how much further U.S. interest rates would rise, with New York
Fed President John Williams saying that the central bank's
policy path will depend on incoming data.
Meanwhile, Philadelphia Fed Bank President Patrick Harker
said he feels that the end of rate hikes may be near.
Money markets are pricing in a roughly 74% chance that the
Fed will raise rates by 25 basis points next month, though
multiple rate cuts are also being priced in as early as July
through to the end of the year. Banking turmoil sparked by the collapse of Silicon Valley
Bank last month has added to bets that the Fed would not raise
rates as high as previously feared in order to ease stress on
the sector.
On Tuesday, Chicago Fed President Austan Goolsbee said that
the U.S. central bank should be patient about raising interest
rates in the face of recent banking sector stress.
Against the yen , the dollar slipped 0.06% to
133.62, though was perched near Monday's one-month high of
133.87 yen, a reflection of the stark contrast between the Fed's
aggressive monetary policy tightening cycle and the Bank of
Japan's (BOJ) ultra-loose policy.
The International Monetary Fund said in its global financial
stability report released on Tuesday that the BOJ could help
prevent abrupt policy changes later by allowing more flexibility
in its yield curve control policy.
Elsewhere, the Aussie rose 0.07% to $0.6658, while
the kiwi gained 0.05% to $0.6195.
In cryptocurrencies, bitcoin was last marginally
higher at $30,285, holding above the key $30,000 level after
breaching it for the first time in 10 months on Tuesday.
Ether , the second largest cryptocurrency, stood
at $1,893.50.
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