Dollar Pauses Ahead of Inflation as US, China Talk
The dollar index traded little changed, erasing earlier advances, as talks between the US and China in London continue for a second day. Traders are awaiting US inflation data this week to gauge the Federal Reserve’s interest-rate path. The British pound was lagging behind peers after weak local employment data.
The Bloomberg Dollar Spot Index traded near little changed after advancing as much as 0.3% earlier in the day.
GBP/USD was down 0.2%, after falling as much as 0.7% to 1.3456
UK employment plunged by the most in five years and wage growth slowed more than forecast.
After that data, traders ramped up bets on interest-rate cuts from the Bank of England to fully price two more quarter-point reductions this year.
USD/JPY rose 0.1% to 144.64.
Bank of Japan Governor Kazuo Ueda says that there’s limited room for policymakers to stimulate the economy should it confront severe downward pressures.
They will keep rising rates if there is more confidence in the price trend.
EUR/USD advanced 0.1% to 1.1433
The European Central Bank should wait until at least September to have an in-depth discussion about an interest-rate move, according to Governing Council member Boris Vujcic.
USD/CHF fell 0.1% to trading near 0.8213.
Morgan Stanley strategists said that markets are underpricing the risk that Switzerland will return to negative interest rates later this month, adding that ongoing strength in the Swiss franc supports the central bank easing policy by 50 basis points.
Source: Bloomberg
