|
 The New Zealand dollar was again the marginal exception to that
rule, resisting more losses after its central bank governor played
down the chances of further deep cuts to interest rates.
But even with a more encouraging tone on China's stock markets
limiting the damage, the Canadian and Australian dollar were both
down by 0.2-0.3 percent in mid-morning trade in Europe.
The dollar, euro and yen were all broadly steady, and the broader
dollar index against a basket of currencies a touch lower, ahead of
a Fed policy statement that may be crucial for fading expectations
of a rate rise in September.
"The commitment of many people to a September view has dripped
away," said Jane Foley, a currency strategist with Rabobank in
London.
"It would be a big surprise for (Fed chief Janet) Yellen to be
particularly hawkish today."
Mid-morning in Europe, the dollar was down less than 0.1 percent
against the euro at $1.1068 <EUR=> and flat at 123.56 yen. <JPY=>
The mood around the U.S. currency and economy remains solid. Even if
the Fed takes until later this year, or even early next, to raise
interest rates, it will be doing so while many of its peers are
still looking in the opposite direction.
But there has been a shift away from the past year's expectations of
gains against the euro, yen and other majors towards playing for a
rising dollar against developing world currencies such as the rand,
Brazilian real or Turkish lira.
Among the majors, the biggest loser was the Australian dollar, down
almost half a percent to $0.7302 <AUD=D4> at one point before
recovering some ground.
That reflects the growing concerns around economies where growth is
reliant on commodity prices at a time when China is slowing, global
growth is wobbling and short-term supply of many natural resources
is high.
"We expect broad dollar strength against the overall commodity
currency complex in developed markets as well as in emerging
markets," analysts from Barclays said in a note focusing on the
outlook for commodities prices and currencies.
[to top of second column] |
"Macroeconomic risks, particularly out of China could limit upside
demand surprises, supply surprises appear largely to have been on
the upside across most commodity markets."
The Fed's policy statement is due at 1800 GMT, and trading ahead of
that could be swayed by Wednesday being the last trading day for
settlement before the month's end, traders said.
Matt Cobon, head of rates and foreign exchange at Threadneedle Asset
Management in London, argued that rate expectations on the dollar
had in reality been static this year and that much of a longer-term
structural adjustment in favor of the dollar has also been priced
in.
"I've been the world's biggest bear on commodity currencies and the
world's biggest bear on emerging markets for a long time," he said.
"But for the first time in years I see a relative value opportunity
in owning some of this stuff. I think the dollar in terms of fair
value is running ahead of where it should be due to cyclical
reasons."
(Editing by Alison William)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
