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SINGAPORE, Oct 17 (Reuters) – The U.S. dollar weakened on Tuesday as traders assessed developments in the Middle East and braced for a slew of central bank officials’ speeches this week, headlined by Federal Reserve Chairman Jerome Powell, to assess developments in the Middle East and financial conditions. The price moved within a narrow range. Policy outlook.
The yen has been pegged at a key level of 150 yen to the dollar, and investors remain on the lookout for signs of intervention by Japanese authorities.
The yen was recently valued at 149.60 yen to the dollar, and although it fell to a one-year low of 150.17 yen on October 3, the temporary rise was a relief.
Masato Kanda, Japan’s top financial diplomat, said that despite the recent yen weakness, the yen is still seen as a safe-haven asset, along with the dollar and Swiss franc, and is benefiting from demand from the Middle East conflict. Stated.
The Israeli shekel on Monday broke above the key level of 4 shekels to the dollar for the first time since 2015, due to unrest over the war between Israel and the Palestinian militant group Hamas. The dollar was last trading at $4.0176 in volatile trade on Tuesday.
“Geopolitics will continue to dominate markets over the coming week, as investors continue to weigh the risks of escalation from US authorities’ approach to preventing the conflict from spreading to other parts of the region,” Charu Chanana said. “It will be a major driving force.” Market Strategist at Saxo in Singapore.
The dollar index, which measures the value of the U.S. currency against six rival currencies, rose 0.056% to 106.32, after falling 0.36% on Monday.
Investors’ attention will be firmly on Federal Reserve Chairman Jerome Powell, who is scheduled to speak on Thursday, in a week packed with speeches from top regional bankers. Fed officials plan to enter a blackout period on Oct. 21 ahead of the Oct. 31-November Fed period. 1 meeting.
Philadelphia Fed President Patrick Harker said Monday that the central bank should not add new pressure to the economy by increasing borrowing costs.
Federal funds futures traders are pricing in a 33% chance of a December rate hike and a 10% chance of a November rate hike, according to CME Group’s FedWatch tool.
Christopher Wong, currency strategist at OCBC, said the dollar is likely to remain range bound for now.
“A long-term rise (in interest rates), the relative resilience of US growth, and concerns about escalating conflict are some of the factors that could support support for the dollar,” Wong said.
“However, the Fed’s less hawkish comments suggest it may be preparing for an extended pause, which could ease dollar upside.”
The focus was also on UK pay statistics, with average weekly wage growth expected to slow to an annualized 8.3% in the three months to August, down from 8.5% in July, according to a Reuters poll. ing.
August’s data could raise concerns about another rate hike at the Bank of England’s next meeting in November, said Michael Hewson, chief market analyst at CMC Markets in London.
“While these concerns appear to be overblown, they may not matter in the short term given the huge hit to consumer incomes over the past 18 months and the further deterioration of consumer living conditions. It can’t be.”
The pound fell 0.14% on the day to last at $1.2199, after gaining 0.6% on Monday. The pound fell by 3.7% over the month.
The euro fell 0.14% to $1.0545.
In an interview with a Dutch newspaper, Philippe Rehn, chief economist at the European Central Bank, said it would take some time, perhaps until next spring, before the central bank could be confident that inflation was back to its 2% target. He said he was deaf.
The Australian dollar rose 0.17% to US$0.6353. The Reserve Bank of Australia considered raising interest rates at its most recent policy meeting, but decided there was not enough new information to justify the action, according to minutes from the Reserve Bank of Australia’s October 3 policy meeting.
The New Zealand dollar weakened by 0.47% after Tuesday’s figures showed consumer inflation had hit a two-year low, reducing expectations that the central bank would raise the cash rate further in November. It fell to $0.5901.
Reporting by Ankur Banerjee in Singapore; Editing by Shri Navaratnam and Kim Coghill
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