Tipped to stay range-bound until Bernanke’s Jackson Hole speech
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The dollar edged higher against most major rivals in Asian trading hours Monday, with some strategists saying moves for the U.S. currency were likely to continue to be limited for the rest of the week.
The dollar index DXY +0.10% , which measures the greenback against a basket of six currencies, traded at 74.065, from 74.008 in late North American trading Friday.
“We expect the U.S. dollar to be range-bound this week until Federal Reserve chairman Ben Bernanke’s speech at Jackson Hole on Friday,” said Commonwealth Bank currency strategists Monday.
Last year’s meeting preceded a further bout of quantitative easing from the U.S. Commonwealth Bank’s strategists said that if suggestions emerge from this week’s meeting that another round of easing is on the way, then U.S. bond yields and the dollar may decline.
Still, they added that recent declines for U.S. bond yields “suggests to us that Bernanke does not need to announce quantitative easing at this stage.”
They added, in an environment of concern about the global growth outlook, safe haven currencies such as the Japanese yen are likely to be well supported although gains may be tempered by the threat of intervention. Read more on potential intervention.
The dollar USDJPY -0.07% bought 76.77 yen, from ¥76.39 in late trading on Friday.
The euro EURUSD -0.09% traded at $1.4377, from $1.4389 at the end of last week. Sterling GBPUSD +0.09% managed to trade at $1.6501, just up from $1.6482 on Friday.
Sarah Turner is MarketWatch's bureau chief in Sydney.
