Traders currently lay 77% odds on another quarter-point hike on May 3, but that is seen as the likely peak, with as many as two quarter-point cuts priced in for the end of the year. IG analyst Tony Sycamore also sees risks skewed to the downside for the euro against the dollar. As long as the pair is below monthly resistance at around 1.1075, "EUR/USD remains vulnerable to a pullback to 1.0800," he wrote in a report. Meanwhile, the dollar was little changed at 133.68 yen . The market consensus is that Ueda will leave ultra-easy policy settings unchanged on Friday, but no one is willing to rule out another surprise like the shock doubling of the 10-year bond yield band in December. Aussie dollar traders are more confident that the Reserve Bank of Australia will keep rates unchanged for a second meeting next week after some softness in consumer inflation data on Wednesday. The currency rose 0.11% to $0.66115 on Thursday, after dipping to a 1 1/2-month low of $0.6592 in the previous session. New Zealand's kiwi dollar rallied 0.43% to $0.61415, clawing back the previous session's losses after ANZ Bank's business confidence survey showed some improvement among retail and agricultural respondents, although the headline reading was largely unchanged. Sterling was flat at $1.2474, retaining Wednesday's 0.48% advance. Leading cryptocurrency bitcoin firmed to around $29,110, following a day when it jumped as high as $30,022, only to then slide as low as $27,242. IG's Sycamore says the initial strength was driven by U.S. banking concerns, but the market was then "apparently spooked by a large sell order." Provided bitcoin can keep above $25,000 though, Sycamore expects the token to test this month's high at $31,035. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Kevin Buckland; Editing by Sam Holmes and Sonali Paul)
By Kevin Buckland
TOKYO, April 27 (Reuters) - The euro hovered near a
one-year high versus the dollar on Thursday, as Europe's
resilient economy contrasted with banking contagion risks in the
United States, the debt ceiling standoff and a potential
recession.
The risk-sensitive Aussie struggled to stay above the key 66
cent mark, while its New Zealand counterpart bounced after a
survey showed retail and agricultural businesses generally more
upbeat.
The yen was in a holding pattern as the Bank of Japan began
a two-day policy meeting, the first under new governor Kazuo
Ueda.
Europe's single currency ticked up 0.12% to
$1.10525, edging back toward the overnight peak at $1.1096, the
highest since April of last year.
The dollar index - which measures the greenback
against six major peers, with the euro the most heavily weighted
- was little changed at 101.36, following a 0.42% slide the
previous day, when it touched a near two-week low of 101.00.
Germany again revised up growth forecasts on Wednesday, and
a survey showed a continued pickup in consumer confidence.
By contrast, U.S. capital goods spending fell more than
expected in the latest data overnight, adding to jitters about a
downturn. The mood was not helped by First Republic Bank's continued slump, or the continued wrangling over an
extension to the U.S. debt ceiling.
"The resilient euro zone economy alongside underlying
inflation that is still going up and not down can see the ECB
(European Central Bank) maintain their hawkish stance,
supporting EUR," Kristina Clifton, senior currency strategist at
Commonwealth Bank of Australia, wrote in a client note.
At the same time, U.S. inflation is showing a stubborn
disconnect with growth, keeping pressure on the Federal Open
Market Committee to tighten policy further, Clifton said.
"The risk of more than one hike to the (Fed) Funds rate is
an upside risk to the USD in coming months."
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.