Thursday October 23, 2014 - 01:34:13 GMT
Share This Story
Reuters - www.reuters.com
FOREX-Dollar holds steady, supported by Treasury yields, sagging euro
* Dollar underpinned after uptick in U.S. CPI
* Bank sector concerns weigh on euro
* Euro zone PMI awaited for market cues
By Shinichi Saoshiro
TOKYO, Oct 23 (Reuters) - The dollar steadied on Thursday, hovering near a one-week high versus the euro, supported by a slight rise in Treasury yields following news of an uptick in U.S. inflation.
Concerns over the health of the European banking sector also weighed on the euro and underpinned the dollar after media reported that 11 euro zone banks had failed stress tests run by the European Central Bank. The test results will be published on Sunday.
The dollar edged up 0.1 percent to 107.20 yen, so far eking out a 0.2 percent gain versus the Japanese currency this week.
Data from the U.S. overnight showed the U.S. CPI rose 1.7 percent in the 12 months through September after a similar rise in August.
The euro stood little changed at $1.2645, within reach of a one-week low of $1.2637 hit overnight.
Market focus was on the euro zone business sentiment PMI due later in the session. Signs of the euro zone economy losing momentum have helped feed global growth fears this month, and any fresh suggestion of economic weakness is expected to push the euro lower.
"The euro will come under pressure if the PMI readings disappoint. But it will not benefit the dollar too much in turn, as U.S. yields still remain relatively low," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.
"Market players are hesitant to build positions ahead of next week's Federal Reserve meeting, especially as officials have sent dovish signals recently," he said.
A weak euro zone PMI reading could also dampen expectations of an early rate hike from the Federal Reserve, and act as a drag on the dollar.
The dollar index, a gauge of the greenback's strength against a basket of major currencies, stood little changed at 85.766, hovering close to a one-week high of 85.789 reached the previous day.
Sterling extended losses after a setback overnight from dovish Bank of England minutes, which showed policymakers were firmly against raising interest rates when they met earlier this month.
The pound was down 0.1 percent at $1.6044 after hitting a one-week trough of $1.6012 the previous day.
The New Zealand dollar fell about half a U.S. cent on Thursday in the wake of softer-than-expected inflation data that could give the Reserve Bank of New Zealand room to further delay its next interest rate hike.
The kiwi fell toward $0.7860 - a low last seen on Oct. 15 - from around $0.7910 after the consumer price index rose 0.3 percent in the third quarter, short of the 0.5 percent forecast.
The Australian dollar held steady at $0.8679.
(Additional reporting by Ian Chua; Editing by Eric Meijer)
© Thomson Reuters 2014. All rights reserved.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."