Dollar Pares Gain; Kiwi Up Ahead of RBNZ Meeting
The dollar pared its gain after rising 0.4% earlier in the day as traders focused on potential renewed geopolitical tensions in the Middle East and risk-off sentiment spread across equity markets. The kiwi climbed ahead of the Reserve Bank of New Zealand’s Wednesday meeting.
The Bloomberg Dollar Spot Index traded little changed.
Liquidity thinned for the Lunar New Year holiday with Asian markets including Singapore, Hong Kong and mainland China closed for the holiday.
Many traders are paying close attention to the indirect talks between the US and Iran that resumed in Switzerland on Tuesday.
“The US Dollar is trading in favorable ranges all across the board with markets on risk-off mode as all eyes are on the potential for armed conflict in Iran as the globe looks for the US to negotiate a deal that could prevent it,” according to a note from Monex.
Strategists and traders are also looking ahead to PCE and GDP data on Friday.
NZD/USD rose 0.3% to 0.6048 hours before the central bank is expected to keep rates steady at its meeting on Wednesday.
USD/CAD little changed at 1.364 after softer-than-expected January CPI data from Canada.
“USDCAD is trading a bit above our FV estimate (1.3585) but the CAD may slip back to the 1.37 area before USD sellers re-emerge,” said Shaun Osborne, chief foreign exchange strategist at Scotiabank.
GBP/USD falls by 0.5% to 1.3561, lowest since Feb. 6
The jobless rate climbed to 5.2% in the final quarter of last year, the Office for National Statistics said Tuesday, the highest since early 2021 and above the 5.1% economists were forecasting; growth in average weekly earnings also slowed more than estimated.
Yields on 10-year government bonds dropped three basis points to 4.37% while money markets now fully price in a half-point of reductions by year-end.
USD/JPY inched down 0.1% to 153.289.
EUR/USD little changed at 1.1848; the euro is down a sixth day, the longest streak since November.
German investor optimism unexpectedly fell in February.
AUD/USD climbs 0.2% to 0.7084; a material shift in the economic outlook prompted the Reserve Bank of Australia to hike interest rates this month, minutes of its Feb. 2-3 meeting showed.
Source : Bloomberg.com
