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☆ Euro, sterling slide versus dollar ahead of U.S. inflation data
▼ + stars: | 2023-09-13 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

The dollar index , which tracks the currency against six peers including yen, euro and sterling, held firm, though moves were subdued, up 0.13% to 104.73, as traders awaited the U.S. consumer price index (CPI) reading for August. The release comes just a week before Federal Reserve officials gather to decide on interest rate policy. The euro fell 0.2% to $1.0731 as markets raised their bets on further ECB rate hikes despite recent data showing the decline in euro zone business activity accelerated faster than initially thought last month. A source told Reuters that the ECB expects inflation in the 20-nation euro zone to remain above 3% next year, bolstering the case for a 10th consecutive interest rate increase on Thursday. YEN RETRACES GAINSThe yen fell as traders further digested comments from Japan's top central banker on a possible early exit from its negative interest rate policy.

Persons: Dado Ruvic, CME's, BoE, Stephen Gallo, Jim Reid, Deutsche Bank . Sterling, YEN RETRACES, Hiroshige Seko, Kazuo Ueda's, Ueda, Joice Alves, Brigid Riley, Alison Williams, Mark Heinrich Our Organizations: REUTERS, Sterling, European Central Bank, Federal Reserve, Federal, ECB, FX, BMO Capital Markets, U.S, CPI, Reuters, Deutsche Bank ., Bank of Japan, Fed, Thomson Locations: U.S, Japan, London, Tokyo

☆ Dollar edges up ahead of inflation reading, euro awaits ECB decision
▼ + stars: | 2023-09-13 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

The dollar index , which tracks the currency against six peers including yen, euro and sterling, held firm, though moves were subdued, up 0.1% to 104.70, as traders awaited the U.S. consumer price index (CPI) reading for August. The release comes just a week before Federal Reserve officials gather to decide on interest rate policy. Elsewhere, the euro edged 0.1% lower to $1.0742 ahead of the ECB meeting on Thursday. A source told Reuters that the ECB expects inflation in the 20-nation euro zone to remain above 3% next year, bolstering the case for a 10th consecutive interest rate increase on Thursday. YEN RETRACES GAINSThe yen fell as traders further digested comments from Japan's top central banker on a possible early exit from its negative interest rate policy.

Persons: Dado Ruvic, CME's, Jim Reid, Deutsche Bank . Sterling, YEN RETRACES, Hiroshige Seko, Kazuo Ueda's, Ueda, Joice Alves, Brigid Riley, Alison Williams Organizations: REUTERS, European Central Bank, Federal Reserve, Commerzbank, ECB, Reuters, Deutsche Bank ., Bank of Japan, Fed, Thomson Locations: Japan, London, Tokyo

☆ Dollar steady as U.S. inflation data awaited, yen retraces gains
▼ + stars: | 2023-09-13 | by ( ) www.cnbc.com time to read: +3 min

More broadly, the dollar held firm, though moves were subdued as traders awaited a closely watched U.S. inflation reading due later on Wednesday. Analysts attributed the slide to an unwinding of long dollar positions after a recent run of resilient U.S. economic data. Wednesday's U.S. consumer price index, or CPI, data for August comes just a week before Federal Reserve officials gather to decide on interest rate policy. "In recent months, European inflation, core inflation in particular, has fallen more slowly than expected. "The high inflation rate warrants another rate hike, but the economic indicators ... signal that a recession is imminent."

Persons: Kazuo Ueda, Alvin Tan, Ueda, Hiroshige Seko, Sterling, CME's, Tina Teng Organizations: Bank of Japan, Asia FX, RBC Capital Markets, Federal Reserve, U.S, Fed, CMC Markets, European Central Bank, Reuters, ECB, Rabobank Locations: U.S, Asia

☆ Dollar steady ahead of key US inflation data, yen retraces gains
▼ + stars: | 2023-09-13 | by ( Brigid Riley | ) www.reuters.com time to read: +3 min

In the broader currency market, the dollar stood firm, though moves were subdued as traders stayed on guard ahead of the closely-watched U.S. inflation reading out later on Wednesday. Wednesday's U.S. consumer price index (CPI) data for August comes just a week before Federal Reserve officials gather to decide on interest rate policy. While the central bank is largely expected to keep rates on hold at next week's meeting, according to CME's FedWatch Tool, the Fed's next move in November remains more uncertain. "In recent months, European inflation, core inflation in particular, has fallen more slowly than expected. "The high inflation rate warrants another rate hike, but the economic indicators ... signal that a recession is imminent."

Persons: Dado Ruvic, Kazuo Ueda, Alvin Tan, Ueda, Hiroshige Seko, Sterling, CME's, Tina Teng, Brigid Riley, Shri Navaratnam Organizations: REUTERS, Rights, Bank of Japan, Asia FX, RBC Capital Markets, Federal Reserve, U.S, Wednesday's, Fed, CMC Markets, European Central Bank, Reuters, Rabobank, Thomson Locations: U.S, Asia, Wednesday's U.S

With inflation accelerating, Ueda could finally set Japan on a path to raise rates after the BOJ spent a decade fighting deflation risks with its unorthodox bond buying scheme costing trillions of yen. Ueda himself on Friday said current policy settings were appropriate, which also put a bit of a dampener on expectations of any shift. Implied volatility has also eased in the forex options market, suggesting an ebbing in bets on big shifts in the yen exchange rate. "It's not very apparent that (Ueda) would take on the job and then immediately change the policy." To be sure, 10-year Japanese yields were untraded at the BOJ's ceiling on Monday, indicating plenty of investors are staying short.

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