<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Rae Wee; Editing by Jacqueline Wong & Simon Cameron-Moore)
By Rae Wee
SINGAPORE, April 12 (Reuters) - The dollar dipped on
Wednesday against most major currencies, with the exception of
the yen, with investors expecting U.S. inflation data out later
in the global day to hold some clue on how soon U.S. interest
rates will peak.
Against a basket of currencies, the U.S. dollar index fell 0.07% to 102.05.
The euro was last 0.12% higher at $1.0926 and
sterling rose 0.02% to $1.2430, with both currencies
some distance away from their one-week lows hit on Monday.
The U.S. inflation data for March is forecast to come in
at 5.2% year-on-year, down from 6.0% previously, while core
inflation likely ticked higher to 5.6%, according to a Reuters
poll of economists.
"It could be the difference between a 25bp hike or pause at
the Fed's next meeting in May," said Matt Simpson, senior market
analyst at City Index, adding that money markets could "quickly
revert to reprice a policy pause" if the inflation data comes in
softer than expected.
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. A raft of Fed speakers on Tuesday offered little guidance on
how much further U.S. interest rates would rise. New York Fed
President John Williams said it depended on incoming data.
Philadelphia Fed Bank President Patrick Harker said he felt
that the end of rate hikes may be near, while 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.
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.
Against the yen , the dollar rose to a nearly
one-month high of 134.045, 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 Bank of Japan
could help prevent abrupt policy changes later by allowing more
flexibility in its yield curve control policy.
Elsewhere, the Aussie rose 0.32% to $0.6675, while
the kiwi gained 0.19% to $0.6204.
In cryptocurrencies, bitcoin slipped marginally
to $30,001, 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 $1,867.90.
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