SPY411.64+0.15 0.04%
DIA337.55-0.31 -0.09%
IXIC13,850.00-50.19 -0.36%

FOREX-Dollar firms as investors keep eagle eye on Fed guidance

· 03/17/2021 00:21
FOREX-Dollar firms as investors keep eagle eye on Fed guidance

Dollar firm after three days of gains ahead of Fed

Markets expect Fed may lift 2023 rates projections

Euro may be hampered by delay in vaccine rollouts

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

Adds comments; updates prices

By Hideyuki Sano and Sagarika Jaisinghani

- The U.S. dollar held gains against major currencies on Wednesday as investors looked to the U.S. Federal Reserve's policy meeting for indications it could start rate hikes earlier or let bond yields rise further.

Against the yen, the greenback firmed 0.1% to 109.085 yen JPY=, hovering near nine-month highs hit this week. The euro EUR= was flat versus the dollar after declining in the past three sessions.

With Fed policymakers expected to forecast the fastest U.S. economic growth in decades in the wake of COVID-19 vaccinations and $1.9 trillion in new stimulus, market participants will be focused on cues that the central bank could start raising interest rates in 2023, earlier than it had said. nL1N2L82OT

"It is likely that the FOMC's economic forecasts will acknowledge the improved growth picture this year, but will continue to show a long road toward conditions consistent with maximum employment that would put sustained pressure on inflation," Morgan Stanley strategist Matthew Hornbach said.

"The Fed being more dovish than expected would suggest U.S. yields and the dollar moving lower in the near term, particularly against risk currencies, but we continue to see upside risks for USD into 2Q."

The dollar index stood at 91.908 =USD, having risen for three straight sessions on support mainly from elevated U.S. bond yields. US/

The euro changed hands at $1.1902, but the common currency could test last week's 3 1/2-month low of $1.18355 on a possible delay in vaccinations.

Europe's medicines watchdog will release results of its investigation into incidents of bleeding, blood clots and low platelet counts in recipients of AstraZeneca's AZN.L coronavirus vaccine on Thursday afternoon. nL1N2LE1CE

"Depending on the outcome, it could hurt the euro zone's business sentiment further and the euro could face fresh selling pressure on the low vaccination theme," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

The British pound was down about 0.1% at $1.3886 GBP= in Asian trading on Wednesday. The currency has come under pressure from profit-taking after it hit a near three-year high last month on the back of a fast vaccine roll-out.

Commodity-linked currencies including the Australian dollar AUD=, the New Zealand dollar NZD= and the Canadian dollar CAD= eased slightly against the U.S. dollar, tracking weakness in commodity prices. MET/L O/R

In the cryptocurrency market, bitcoin BTC=BTSP fell 2.2% to $55,665.45, slipping further away from a record high of $61,781.83 hit on Saturday.

========================================================

Currency bid prices at 410 GMT

Description

RIC

Last

U.S. Close
Previous
Session

Pct Change

YTD Pct
Change

High Bid

Low Bid

Euro/Dollar

EUR=EBS

$1.1901

$1.1903

-0.01%

-2.59%

+1.1906

+1.1893

Dollar/Yen

JPY=D3

109.0800

109.0200

+0.12%

+5.67%

+109.1650

+109.1400

Euro/Yen

EURJPY=

129.82

129.75

+0.05%

+2.28%

+129.9000

+129.7200

Dollar/Swiss

CHF=EBS

0.9257

0.9248

+0.10%

+4.64%

+0.9263

+0.9248

Sterling/Dollar

GBP=D3

1.3888

1.3895

-0.04%

+1.66%

+1.3904

+1.3881

Dollar/Canadian

CAD=D3

1.2455

1.2448

+0.06%

-2.19%

+1.2458

+1.2434

Aussie/Dollar

AUD=D3

0.7732

0.7746

-0.15%

+0.53%

+0.7747

+0.7724

NZ Dollar/Dollar

NZD=D3

0.7182

0.7190

-0.07%

+0.06%

+0.7194

+0.7177










All spots FX=

Tokyo spots AFX=

Europe spots EFX=

Volatilities FXVOL=

Tokyo Forex market info from BOJ TKYFX



(Reporting by Hideyuki Sano in Tokyo and Sagarika Jaisinghani in Bengaluru; Editing by Sam Holmes and Gerry Doyle)

((hideyuki.sano@thomsonreuters.com; +81 3 4520 1195;))