FOREX-Dollar on edge, Kiwi jumps ahead of Fed minutes – Rayrice Forex News

FOREX-Dollar on edge, Kiwi jumps ahead of Fed minutes

By Ian Withers

LONDON, Nov 23 (Reuters) – The US dollar held firm on Wednesday ahead of the release of minutes from the Federal Reserve’s latest policy meeting, with the New Zealand dollar strengthening on the back of a record high to curb high inflation. .

The U.S. dollar index, which measures the currency against a basket of six peers, was broadly at 107.1, after shedding 0.65% the previous day in favor of riskier currencies.

The dollar has rallied against every major currency this year, buoyed by sharp rate hikes aimed at curbing inflation, but the latest slower-than-expected inflation data has investors making bets on future rate hikes.

Investors will scrutinize the minutes from the Fed’s November meeting for any clues on the rate estimate to be released at 1900 GMT.

“For now, FX traders may be torn between continued hawkish comments by Fed members and expectations of what the Fed will do in 2023,” Commerzbank currency analysts said in a note.

The New Zealand dollar rose as much as 0.7 percent, hitting a three-month high, after the country’s central bank raised interest rates sharply despite warning that the economy could spend a full year in recession.

The kiwi ended the day up 0.3% at $0.61715.

The Reserve Bank of New Zealand raised its benchmark rate by 75 basis points to 4.25% – the highest of any G10 economy – and said it may need to increase faster than previously indicated.

The euro rose 0.1% to $1.03090, as new data showed that business activity in the Eurozone slowed slightly in November.

Meanwhile, sterling was broadly unchanged at $1.18915, after a separate survey showed Britain’s economic activity fell at its fastest pace in nearly two years in November.

A surge in Covid-19 cases in China has clouded hopes of reopening the world’s second-largest economy, sending markets on edge.

Shanghai abruptly canceled an auto industry event on Wednesday, while the city of Chengdu planned five consecutive days of mass testing for residents.

Rodrigo Catril, currency strategist at National Australia Bank, said: “The recent imposition of new restrictions will undoubtedly have a negative economic impact.”

But at least for now, the market seems focused on the fact that in the medium term, China is looking to gradually transition to a strategy of living with COVID.

Cryptocurrencies became volatile as Bitcoin oscillated between losses and gains. It was up 2% at $16,520.

(Reporting by Ian Wiers, Additional reporting by Ankur Banerjee in Singapore, Editing by Kim Coghill)

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