Posted by Kevin Buckland
TOKYO (Reuters) – The dollar rose to a nine-month high against the euro as well as Australian and New Zealand currencies on Thursday, with Federal Reserve policymakers largely agreed that an expansion of stimulus programs would begin this year.
The euro fell to $ 1.1684 and slid to $ 0.6848.
The Australian dollar fell to $ 0.72125 but was able to offset most of those losses trading 0.07% lower to $ 0.72265 after Australia reported a stronger job market than economists expected.
The one that measures the currency against the euro, the yen and four other rivals climbed to 93,347, its highest level since April 1.
The greenback gained 0.2% to reach 110.04 yen.
In the minutes of their July 27-28 meeting, released overnight, Fed officials saw the potential to ease bond buying incentives this year if the economy continues to improve as expected, despite the condition for “significant more Progress towards maximum employment had not yet been made.
A reduction in bond purchases is usually positive for the dollar as the Fed will not flood the financial system with cash.
Fed watchers now focus on the annual symposium in Jackson Hole, Wyoming, August 26-28.
“Our view is that Fed officials will continue to signal ongoing steps to normalize policy and provide crucial sustained underlying support for the USD,” Westpac strategists wrote in a customer note.
“The AUD remains in a strong four month downtrend” and is projected to fall below $ 0.72 while the New Zealand dollar is expected to decline to $ 0.68, although it should rise later in the year, they wrote.
The kiwi lost support on Wednesday after the Reserve Bank of New Zealand delayed becoming the first G10 central bank to hike rates during the pandemic after a new outbreak locked the nation off just a day earlier.
On Thursday, RBNZ Governor Adrian Orr told parliament he still saw the official cash rate gradually increase to more neutral levels over the next 18 months.
New Zealand reported 11 new COVID-19 cases on Thursday, with the health chief saying he expected the number to spike.
The Australian state of New South Wales, which is based in Sydney, reported record infections on Thursday despite a strict lockdown on a second day.
The surge rebounded, however, after data showed the country’s unemployment rate fell to 4.6% in July, compared to a consensus estimate of 5.0% by economists, though Australia’s Bureau of Statistics said the decline wasn’t necessarily a sign a strengthening of the job market.
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Currency bid prices at 0141 GMT
Description RIC Last US closing price Pct change YTD Pct High Bid Low Bid
$ 1.1690 $ 1.1709 -0.15% -4.31% +1.1716 +1.1684
Dollar / yen
110.0250 109.7800 + 0.11% + 6.40% +110.0350 +109.7900
Euro / yen
128.63 128.51 + 0.09% +1.35% +128.6500 +128.4800
Dollar / Swiss
0.9187 0.9172 + 0.17% + 3.85% +0.9191 +0.9179
Pound sterling / dollar
1.3735 1.3752 -0.10% + 0.56% +1.3757 +1.3732
Dollars / Canadians
1.2675 1.2664 + 0.09% -0.46% +1.2678 +1.2649
Aussie / dollar
0.7224 0.7234 -0.12% -6.08% +0.7243 +0.7213
Dollar / Dollar 0.6863 0.6885 -0.32% -4.43% +0.6888 +0.6848
Tokyo Forex Market Information from BOJ