Dollar rises from 14-month low, yuan dips
Updated at 1500 EDT
By Karen Brettell
NEW YORK, Sept 25 (Reuters) -The dollar bounced off a 14-month low against the euro on Wednesday in choppy trading, but investors held onto bets that the Federal Reserve will make another large interest rate cut at its November meeting on weakening labor optimism.
The yuan also eased on growing doubts about the impact of a new round of Chinese stimulus and after the initial rally on the news was seen as overdone.
The greenback tumbled on Tuesday after data showed that U.S. consumer confidence dropped by the most in three years in September amid mounting fears over the labor market.
“The narrowing in the labor market differential, which is sort of indicative of demand and supply conditions in the employment market, was a very bad omen for the U.S. economy,” said Karl Schamotta, chief market strategist at Corpay in Toronto.
“Markets are interpreting this as a sign that the Federal Reserve is very likely to deliver a second emergency-sized cut at its November meeting,” he added.
Traders are now pricing in 59% odds of a 50-basis point cut at the Fed’s Nov. 7 meeting, up from 37% a week ago, and a 41% chance of a 25 basis point reduction, according to the CME Group’s FedWatch Tool.
The Fed last week kicked off an anticipated series of interest rate cuts with a larger-than-usual half-percentage-point reduction that Fed Chair Jerome Powell said was meant to show policymakers' commitment to sustaining a low unemployment rate now that inflation has eased.
Data on Wednesday showed that sales of new U.S. single-family homes fell less than expected in August.
This week's main U.S. economic focus will be the Personal Consumption Expenditures index for August on Friday.
The euro EUR=EBS was last down 0.41% at $1.1134 after earlier reaching $1.1214, the highest since July 2023. The dollar index =USD rose 0.68% to 100.91. It earlier fell to 100.21, matching a low from Sept. 18, which was the weakest since July 2023. The greenback gained 1.03% to 144.68 Japanese yen JPY=EBS and reached 144.75, the highest since Sept. 3.
China's stimulus had earlier contributed to a stronger euro, with its resilience partly driven by a perception that a better outlook for Chinese demand could feed its way back through into Germany and through into Europe, said Jane Foley, senior forex strategist at Rabobank.
Despite weak German economic data and concerns about the French budget, the euro has held up "extremely well" against the dollar this week, she said.
France's budget deficit risks overshooting 6% of economic output this year, the country's new budget minister, Laurent Saint-Martin, told lawmakers in the National Assembly on Wednesday.
The Chinese yuan gave back earlier gains a day after China's central bank unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk and back towards the government's growth target.
The dollar was last up 0.33% at 7.033 yuan CNH=D3 in offshore trading. The Chinese currency earlier reached 6.9952, the strongest since May 2023.
Riskier currencies including some in emerging markets that had rallied on the stimulus also pulled back.
“We are seeing a number of risk-sensitive asset classes essentially retracing from the levels that were reached in the aftermath of that announcement, and that's really on the basis of a skepticism among investors as to whether the measures that were announced will succeed in boosting growth in the real economy,” said Schamotta.
The Australian dollar, which is viewed as a more liquid proxy for the yuan, also dipped on ebbing inflation in the country. Australian domestic consumer prices slowed to a three-year low in August, while core inflation hit its lowest since early 2022.
The Aussie AUD=D3 was last down 0.99% at $0.6823. It earlier hit $0.6908, the highest since February 2023.
In cryptocurrencies, bitcoin BTC= fell 1.41% to $63,324.
US consumer confidence https://reut.rs/4dla7rY
Reporting By Karen Brettell; Additional reporting by Rae Wee and Linda Pasquini; Editing by William Maclean and Jonathan Oatis
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
