FOREX-Dollar slips early against pound, kiwi looks to RBNZ

FOREX-Dollar slips early against pound, kiwi looks to RBNZ

Reuters  | Feb 24, 2021 08:40

FOREX-Dollar slips early against pound, kiwi looks to RBNZ

* Increase in risk appetite hurts dollar
* Economic optimism favours more kiwi gains
* Powell emphasises low rates here to stay

By Stanley White
TOKYO, Feb 24 (Reuters) - The dollar slipped to a three-year
low against the British pound and nursed losses against
commodities currencies on Wednesday as investors increased bets
that a global economic recovery will boost riskier assets.
The New Zealand dollar was in focus before a central bank
meeting that could send the kiwi higher if policymakers make any
positive comments about the local economy.
U.S. Federal Reserve Chair Jerome Powell reiterated on
Tuesday that interest rates will remain low and the Fed will
keep buying bonds to support the U.S. economy, which many
traders say is a long-term negative factor for the dollar.
At the same time, more money is flowing toward currencies
that are expected to benefit from a pick-up in global trade and
to countries that are bouncing back quickly from the coronavirus
pandemic, which is also weighing on the dollar.
"Signs of economic recovery are lifting commodities prices,
which in turn supports currencies of commodities exporters,"
said Junichi Ishikawa, foreign exchange strategist at IG
"Risk appetite has improved a lot, and this leaves the
dollar at a big disadvantage."
The Australian dollar AUD=D3 , which tends to benefits from
rising metal and energy prices, traded near a three-year high.
The British pound GBP=D3 rose to $1.4120, the highest
since April 2018.
The outlook for sterling has brightened as investors cheer
Britain's rapid coronavirus vaccination programme and its plans
to ease lockdown restrictions on economic activity.
Against the euro EUR=D3 , the dollar traded at $1.2153,
close to a six-week low.
The dollar held steady at 105.29 Japanese yen JPY=D3 .
Powell pushed back against suggestions that loose monetary
policy will lead to runaway inflation and financial bubbles,
which have emerged as two important themes this year, because
there is growing scepticism about the rapid pace of gains in
global stocks. For economies that have limited disruptions caused by the
coronavirus outbreak, their central bankers now face questions
of when to start tightening policy, which makes the dollar look
less attractive, some analysts say.
The Reserve Bank of New Zealand is expected to keep policy
on hold on Tuesday, but three economists in a Reuters poll
expect a rate hike by the end of next year due to a
quicker-than-expected economic recovery.
Ahead of the decision, the New Zealand dollar NZD=D3 held
steady at $0.7338, close to a three-year high.

Currency bid prices at 0012 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Euro/Dollar EUR=EBS $1.2153 $1.2150 +0.02% -0.53% +1.2155 +1.2143
Dollar/Yen JPY=D3 105.2950 105.2600 +0.05% +1.96% +105.3250 +105.2400
Euro/Yen EURJPY= 127.96 127.86 +0.08% +0.82% +127.9800 +127.7800
Dollar/Swiss CHF=EBS 0.9054 0.9054 +0.02% +2.36% +0.9056 +0.9048
Sterling/Dollar GBP=D3 1.4118 1.4112 +0.05% +3.35% +1.4122 +1.4111
Dollar/Canadian CAD=D3 1.2589 1.2590 +0.03% -1.10% +1.2596 +1.2583
Aussie/Dollar AUD=D3 0.7908 0.7909 -0.03% +2.79% +0.7915 +0.7903
NZ NZD=D3 0.7338 0.7343 -0.05% +2.20% +0.7343 +0.7334

All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX

World FX rates

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