US dollar steady; Kiwi up 0.2%

London

THE US dollar was broadly steady on Monday (Nov 8) and currency markets lacked momentum as investors weighed up volatile rate projections and central banks' tolerance of inflation.

Last week, the US Federal Reserve stuck to its view that current high inflation is expected to be transitory. The next test of this wait-and-see approach to inflation will be US CPI data due on Wednesday.

At 4.53pm, Singapore time, the dollar index was little changed on the day at 94.229, holding below the 15-month high it hit on Friday following stronger-than-expected US jobs data.

Commodity Futures Trading Commission data showed speculators scaled back their net long position on the US dollar for the fourth week running in the week to Nov 2.

The Australian dollar, which is seen as a liquid proxy for risk appetite, was down 0.1 per cent on the day at US$0.73992.

The New Zealand dollar was up 0.2 per cent at US$0.71395, boosted by Prime Minister Jacinda Arden announcing that lockdown measures will likely be phased out by the end of the month.

New Zealand will ease Covid-19 restrictions in Auckland from Wednesday, as vaccination rates rise.

The euro was a touch higher, up 0.1 per cent at US$1.1573.

Eurozone inflation will ease next year and remains too weak in the medium term, European Central Bank chief economist Philip Lane told a Spanish newspaper, repeating the bank's long-standing message that high price growth is temporary.

Britain's pound was steady around US$1.3486, having tumbled to a 5-week low last week when the Bank of England surprised markets by not hiking rates.

Elsewhere, China's export growth beat economists' forecasts in October, while imports missed expectations, resulting in a record trade surplus. But the yuan was steady versus the US dollar, holding just under the key 6.4 level.

Traders are also looking ahead to Chinese producer and consumer price data due on Wednesday, with annual producer price growth seen surging to 12 per cent in perhaps a harbinger of further price pressure to come through global supply chains.

"While the strong trade surplus this year should have somewhat supported the CNY exchange rates, the overall theme for USD-CNY is the stability," Commerzbank senior economist Hao Zhou wrote in a client note. REUTERS