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Dollar eases as traders bet Fed done with rate hikes
  + stars: | 2023-11-03 | by ( ) www.cnbc.com   time to read: +3 min
United States one dollar bills are curled and inspected during production at the Bureau of Engraving and Printing in Washington. The index is on course to clock a 0.3% drop for the week, just its third week of losses since July. The European Central Bank last week snapped a streak of 10 straight rate increases, with the discussion shifting to how long the rates would stay high. The Japanese yen was 150.41 per dollar, keeping traders nervy and looking for signs of intervention from Japanese authorities. The Australian dollar eased 0.19% to $0.642, while the New Zealand dollar fell 0.24% to $0.588.
Persons: Tapas Strickland, Flavio Carpenzano, Isabel Schnabel, Kazuo Ueda, Sterling Organizations: Engraving, U.S . Federal, NAB, Investor, Analysts, Fed, ECB, Investment, Capital Group, European Central Bank, Bank of Japan, Reuters, Bank of England, New Zealand Locations: United, Washington, U.S
Borrowing costs, or bond yields, in the benchmark euro area issuer are down at least 20 basis points (bps) this week , . Yet this week's notable moves suggest investors are plumping with the view that easing inflation and recession risks are strong bond buy signals. Traders now expect the ECB hikes to peak at around 3.7% by September, suggesting two more hikes from 3.25% currently. COMPLICATEDInvestors cautioned that the European inflation outlook remained more complicated than in the United States, where inflation broadly is down sharply from peaks. This week's fall in borrowing costs followed sharp rises the previous two weeks on bets for more rate hikes.
Persons: Kaspar Hense, Flavio Carpenzano, It's, Cosimo Marasciulo, Marasciulo, BlueBay's Hense, Oliver Eichmann, DWS, Eichmann, Yoruk Bahceli, Harry Robertson, Dhara Ranasinghe, Susan Fenton Organizations: Bank, British, Thursday's, Traders, BlueBay Asset Management, Capital Group, ECB, U.S . Federal Reserve, General Investment Management, Bank of England, NatWest, Pictet Wealth Management, Thomson Locations: Germany, United States, Europe, Amundi, U.S, Britain, DWS
Investors will also look to ECB boss Christine Lagarde for guidance on how the ECB views the trade-off between recession risks and inflation, and when it might pause tightening. Economists say it's too early to call a peak in inflation but the chances of one arriving soon are growing. While an inflation peak may be close if there are no additional shocks from the war in Ukraine, the retreat will be slow initially, ECB policymaker Bostjan Vasle believes. Reuters Graphics Reuters Graphics4/ Is the ECB giving away cash to banks and what will it do about it? Aggressive rate hikes from major central banks and a rout in British bonds have sparked concern about financial instability.
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