Dollar near two-week high before Fed as dovish ECB supports
By Shinichi Saoshiro TOKYO (Reuters) - The dollar held near a two-week high early on Wednesday ahead of the Federal Reserve's closely-watched policy decision later in the day, supported by a surprisingly dovish European Central Bank and bearish eurozone economic data. The dollar index versus a basket of six major currencies was steady at 97.615 after climbing to 97.766 on Tuesday, its highest level since June 3. Focus was on whether the greenback can retain its strength after the Fed's two-day policy meeting ends later on Wednesday
By Shinichi Saoshiro
TOKYO (Reuters) - The dollar held near a two-week high early on Wednesday ahead of the Federal Reserve's closely-watched policy decision later in the day, supported by a surprisingly dovish European Central Bank and bearish eurozone economic data.
The dollar index versus a basket of six major currencies was steady at 97.615 after climbing to 97.766 on Tuesday, its highest level since June 3.
Focus was on whether the greenback can retain its strength after the Fed's two-day policy meeting ends later on Wednesday.
The Fed is widely expected to stand pat on monetary policy this time but open the door for an interest rate cut at the next meeting in July.
"The market has mostly priced in a July rate cut and unless there is a big dovish surprise at the FOMC (Federal Open Market Committee) meeting it is hard to imagine the dollar coming under downward pressure," said Takuya Kanda, general manager at Gaitame.Com Research Institute.
"But there will be a lot to digest at this FOMC, such as the Fed's views on the economy and prices and Chair (Jerome) Powell's comments. It is hard to tell which of these factors the market decides to latch on and react to."
The prospect of the U.S. central bank lowering rates has also driven benchmark Treasury yields to near two-year lows while boosting equity prices.
The euro was steady at $1.1198 after shedding 0.2% overnight, when it brushed a 15-day trough of $1.1181.
The common currency dropped along with a decline in German government bond yields, which hit a new record low on Tuesday, after ECB chief Mario Draghi said the bank will need to ease policy again if inflation doesn't head back to its target.
A closely watched survey by the ZEW Institute showing that the mood among German investors had deteriorated sharply in June also weighed on the euro.
The Australian dollar was a shade higher at $0.6884 after mounting a rebound the previous day, when it pulled away from a 5-1/2-month low of $0.6832 set on growing expectations that the Reserve Bank of Australia may have to cut rates again.
The Aussie, along with the Chinese yuan, got a lift on Tuesday as China and the United States rekindled trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping.
The Chinese yuan extended overnight gains in offshore trade to reach 6.8953 per dollar, its strongest since May 14.
The dollar gained 0.1% to 108.555 yen after losing modest ground overnight.
(Editing by Shri Navaratnam)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
By Rajendra Jadhav MUMBAI (Reuters) - India said on Sunday it was considering granting an emergency authorisation for a COVID-19 vaccine, particularly for the elderly and people in high-risk workplaces, as the country's number of reported infections passed 4.75 million. India, which has consistently reported over 1,000 COVID-19 deaths daily this month, has now recorded 78,586 fatalities from the disease. It lags only the United States globally in overall number of infections, but it has been adding more daily cases than the United States since mid-August
BERLIN (Reuters) - Germany's Christian Democrats were set for an election win in the western state of North Rhine-Westphalia on Sunday, an exit poll showed, but their share of the vote shrank, denting state premier Armin Laschet's ambitions to succeed Chancellor Angela Merkel. Laschet, who is positioning himself as the continuity candidate to succeed Merkel, had hoped to increase the Christian Democrats' share of the vote in the local elections to boost his standing ahead of a December party leadership showdown
By Marco Aquino LIMA (Reuters) - A bid by the opposition-led Congress to remove Peruvian President Martín Vizcarra appeared to falter on Sunday, after key political leaders rejected the ouster over fears the upheaval would plunge the country into a political crisis. César Acuña, head of the second-largest party in Congress and a possible candidate in 2021 presidential elections, said an ouster would "aggravate" the country's current situation, already fragile from the impact of the coronavirus crisis. Acuña's party had given key votes last Friday to start impeachment proceedings against Vizcarra over leaked audio tapes some lawmakers said showed the president trying to downplay ties to a singer being probed over government contracts