(Overall update) By Karen Brettell NEW YORK, June 9 (Reuters) – Investors are expected to look to inflation data and next week’s Federal The dollar bounced back from a two-week low on Friday as it awaits the Reserve Board interest rate decision. Banks are likely to raise interest rates. The Fed is expected to keep rates unchanged at its June 13-14 meeting, but remains hawkish and may raise rates in July as inflation remains above its 2% target likely to. “They still think more needs to be done and I suspect they will continue to undermine expectations of policy easing,” said Vasili Serebriakov, a foreign exchange strategist at UBS in New York. “I think the Fed will continue to be hawkish in that sense,” said Serebriakov, who is expected to revise the “dot plot” of policymakers’ rate expectations and inflation expectations upwards. Data released on Tuesday are expected to show headline inflation rose by 4.1% annualized in May, while core prices rose by 5.3%. The euro recently fell 0.30% against the dollar to $1.0749. The dollar rose 0.34% to 139.40 yen. The dollar index against the six major currencies rose 0.22% to 103.53. The US dollar is mostly range bound as investors await more clear signs of whether the economy will remain strong and inflation will pick up or head into contraction. Last week, the number of new Americans filing for unemployment benefits surged to the highest level in more than a year and a half, according to Thursday’s data. Employers added 339,000 more jobs than expected in the May jobs report released last Friday, but the unemployment rate rose to a seven-month high of 3.7%. “The rise in unemployment claims is pushing unemployment claims closer to a two-year high, and the market is more optimistic about the upcoming weakening of the U.S. economy and Fed rate hikes,” said David Stritch, strategist at CaxtonFX. “It’s taken as a clear sign of hesitation.” The European Central Bank and the Bank of Japan are also scheduled to meet next week. The ECB is expected to raise eurozone rates by 25bps to 3.50% on Thursday, but the Bank of Japan is likely to keep rates unchanged after a two-day meeting on Friday. The Bank of Canada and the Reserve Bank of Australia rocked markets earlier this week by raising interest rates to combat stubborn inflation. The Norwegian krone surged after data showed Norway’s core inflation jumped to a record high in May. Core inflation, which excludes changes in energy prices and taxes, rose to 6.7% from a year earlier, up from 6.3% in April and above the average analyst forecast of 6.2% in a Reuters poll. The dollar fell 1.34% to 10.76 kroner, its lowest since May 17. ================================================== ====== Currency Bid Prices at 3:00 PM (19:00 GMT) Description RIC Final US Closing Percentage YTD Percentage High Bid Low Bid Last Change Session Dollar Index 103.5300 103.3200 +0.22% 0.039% +103.5800 +103.3100 EUR /USD 1.0749 1.0782 -0.30% +0.33% +$1.0786 +$1.0744 USD/JPY 139.3950 138.9300 +0. 34% +6.32% +139.7200 +138.7650 EUR/JPY 149.83 149.78 +0.03% + 6.79% +150.4300 +149.6500 USD/CH 0.9031 0.8992 +0.44% -2.33% +0.9032 +0.8985 GBP/USD $1.2576 $1.2558 +0.13% +3.97% +$1.2590 +$1.2536 USD/Canada 1.3351 1.3359 -0.06% -1.47% +1.3371 + 1.3313 AUD/USD $0.6740 $0.6716 +0.34% -1.14% +$0.6751 +$0.6694 EUR/Switzerland 0.9708 0.9 692 +0.17% -1.89% +0.9718 +0.9685 EUR /lb 0.8546 0.8584 -0.44% -3.37% +0.8590 +0.8542 New Zealand Dollar 0.6125 $0.6096 + 0.48% -3.54% +$0.6139 +$0.6087 USD/USD USD/Norway 10.7600 10.9020 -1.34% +9.60 % +10.9110 +10.7460 Euro/Norway 11.5688 11.7314 -1.39% +10.25% +11. 7690 +11.5470 USD/Sweden 10.8234 10.7937 -0.11% +3.99% +10.8593 +10.7828 EUR/Sweden 11.6305 11.6428 -0.11% +4.31% +11.6877 +11.6232 (Additional report by Amanda Cooper, London. Editing: Jean Harvey and Richard ·Chan)
