Dollar weakens, Fed policy in focus www.reuters.com
The U.S. dollar fell on Wednesday as investors awaited a speech by Federal Reserve Chair Janet Yellen later this month in the absence of new major economic reports that could provide signs of economic strength.
The greenback gained after Friday's jobs report for July showed better-than-expected employment gains, raising prospects for a further rate increase this year. It has since given back those gains.
"It's been a fairly broad trend of dollar selling this week," said Vassili Serebriakov, FX strategist at Credit Agricole in New York.
Data on Tuesday showing that U.S. nonfarm productivity fell in the second quarter helped weigh on the dollar.
Falling Treasury yields on Wednesday also helped weaken the greenback.
Investors expecting a more hawkish tone from Yellen at the U.S. central bank's Aug. 26 symposium in Jackson Hole, Wyoming, may hold off on placing their bets until closer to the event, analysts said.
"There is a window of opportunity to be short dollars without the threat of a hawkish Fed message for a couple of weeks," said Serebriakov. "That is probably partly driving the market."
The dollar index against a basket of currencies fell 0.53 percent to 95.673, after dropping to 95.442, the lowest since last Thursday.
The dollar pared losses after oil prices turned negative.
The greenback was 0.64 percent weaker against the Japanese yen at 101.24 and 0.47 percent lower against the euro at $1.1170.
The next major U.S. economic indicator will be Friday's retail sales report for July.
Reduced liquidity, as investors and traders take summer vacations, is seen as exaggerating price moves.
The Australian dollar advanced to a more than three-month peak of $0.7756, before falling back to $0.7704, buoyed this week by Australia's relatively high yields and stronger investor appetite for risk.
"Part of the Australian dollar's resilience is the lack of follow-through in pricing for a Fed hike in September, limiting the U.S. dollar's gains," analysts at Westpac said in a note.
The British pound was steady at $1.3005, after rising to $1.3094. It fell to $1.2956 on Tuesday, its lowest since July 11.
The Reserve Bank of New Zealand is expected to be the next central bank to cut rates, by 25 basis points to 2.00 percent on Thursday.
The kiwi gained 0.63 percent against the U.S. dollar to $0.7209.
Published Date:2016-08-11