"They're still trying to balance the overall tone," said Kadota. The euro inched 0.05% higher to $1.09885, moving back the middle of its trading range over the past month. Sterling nosed up 0.04% to $1.2631, edging back toward Wednesday's one-year high of $1.2679. The Bank of England releases its policy decision later on Thursday, and is poised for a 12th straight rate hike. Elsewhere, the Aussie dollar rose 0.08% to $0.6784, pushing back toward Wednesday's 2-1/2-month high of $0.6818. New Zealand's kiwi dollar added 0.09% to $0.63735, after touching a nearly three-month high of $0.6384. Earlier gains cooled after data from China - a key trading partner - showed consumer prices rising at a slower pace, giving further evidence of tepid domestic demand. Leading cryptocurrency bitcoin was little changed at around $27,562, after dipping as low as $26,842 overnight for the first time since March. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Kevin Buckland; Editing by Lincoln Feast.)
By Kevin Buckland
TOKYO, May 11 (Reuters) - The dollar sank for a second
day against the yen on Thursday, feeling the pressure from lower
U.S. Treasury yields after slowing inflation gave traders more
confidence that the Federal Reserve is through with rate hikes.
The 10-year Treasury yield , which the dollar-yen
pair tends to track, slipped to 3.4252% in Tokyo trading,
extending an 8 basis point decline from overnight, after
headline CPI printed below 5% for the first time in two years.
The U.S. currency fell 0.26% to trade at 134.025 yen in the Asian morning, and earlier dipped as low as
133.895.
The dollar index - which measures the greenback
against a basket of six major peers, including the yen - edged
0.05% lower to 101.36.
"Yesterday's CPI was a bit of a relief, and we do expect
that the Fed is now finished hiking," said Shinichiro Kadota,
senior FX strategist at Barclays in Tokyo.
"That'll weigh on dollar-yen," with the pair potentially
weakening to as low as 130 in the near term, Kadota said.
Money market traders currently lay only 5% odds on a quarter
point hike in June, and a 95% probability of a pause. Three
quarter point cuts are priced by the end of this year. Bank of Japan policymakers, meanwhile, saw the country
making progress towards sustainably hitting their inflation
target, according to minutes from their April meeting.
But they also agreed on the need to maintain ultra-easy
stimulus setting amid uncertainty about the sustainability of
wage growth as well as the global economic outlook.
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