SYDNEY- The dollar hovered a little below the year’s peaks on Tuesday, while cryptocurrencies scaled records, as inflation numbers loom as the next test of traders’ thinking on the outlook for interest rates.
Price data, due from both China and the United States on Wednesday, could also test central bankers’ promises of patience. Economists expect the numbers to show profound pressure on factory gate prices in China, which can flow through global supply chains, and US consumer prices galloping ahead.
Inflation expectations had tugged real US yields and the dollar a little lower overnight, particularly against the New Zealand dollar, but it remains within sight of highs hit on Friday.
The euro, which had dropped to a 15-month trough of $1.15135 in the wake of Friday’s strong US jobs figures, held at $1.1588.
The greenback steadied just above 113 yen. However it had dropped about 0.7 percent against the kiwi overnight as traders stay wary of the possibility that the Reserve Bank of New Zealand could raise rates by 50 basis points (bps) later this month.
The kiwi was last steady at $0.7162.
“If the RBNZ is of a mind to hike by 50bps, now’s the time,” ANZ analysts said in a note.
“That still seems incongruous with the uncertain global backdrop and cautious tone of other central banks. Still, until we know the outcome, markets will price in the risk.”
