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16 July 2024

Dollar steady ahead of US data

By Agencies

The dollar held steady against its major rivals in Asian trade on Wednesday as market players waited for key United States (US) economic data for clues on the health of the world's largest economy, dealers said.


The US currency was almost unchanged at 107.79 yen (Dh3.670) in Tokyo afternoon trade against 107.76 yen (Dh3.669) in New York late Tuesday.


The euro dipped to $1.4712 (Dh5.369) from $1.4725 (Dh5.374) and to 158.57 yen (Dh5.399) from 158.70 yen (Dh5.405).


"We need some fresh data to move," said Naomi Fink, senior currency analyst at Bank of Tokyo-Mitsubishi.


The Federal Reserve will release minutes from its January policy-making meeting later on Wednesday, she said, but added that the market would likely discount any optimism in the minutes.


Investors are also bracing themselves for the release of housing and consumer prices data later Wednesday that should provide greater clarity on how the US economy is faring, analysts said.


Fink said the consumer prices index (CPI) for January could dampen speculation of aggressive interest rate cuts by the Fed.


Although the Fed's string of rate cuts suggested slowing growth was a bigger concern than consumer price pressures, the CPI data "could point to inflation risks," she said.


The Fed has lowered its rates by a cumulative 2.25 percentage points since it began easing monetary policy in September to try to cushion the impact of a housing slump and related credit crunch.


The Fed is widely expected to announce another cut in its key rate at a meeting scheduled for March 18 although analysts are split on the likely size of the reduction.


Inflationary concerns due to higher oil prices may prompt the Fed to lower its rate by just 25 basis points, less than previously expected, said Philip Wee, currency strategist at DBS Bank.


The Bank of Japan on Wednesday released the minutes from its policy board meeting in late January, reaffirming it will pay closer attention to increased downside risks in the US economy.


But that was "no surprise" to the market, Fink said.


Against regional Asian currencies, the dollar slipped to 1.4113 Singapore dollars from 1.4114 on Tuesday, to 31.63 Taiwan dollars from 31.66, to 40.615 Philippine pesos from 40.62, and to 31.45 Thai baht from 31.71.


At the same time it rose to 9,175.0 Indonesian rupiah from 9,145.0 and to 944.65 South Korean won from 944.10. (AFP)