Dollar slips early against pound, kiwi looks to RBNZ

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TOKYO — The dollar slipped to a three-year

low against the British pound and nursed losses against

commodities currencies on Wednesday as investors increased bets

that a global economic recovery will boost riskier assets.

The New Zealand dollar was in focus before a central bank

meeting that could send the kiwi higher if policymakers make any

positive comments about the local economy.

U.S. Federal Reserve Chair Jerome Powell reiterated on

Tuesday that interest rates will remain low and the Fed will

keep buying bonds to support the U.S. economy, which many

traders say is a long-term negative factor for the dollar.

At the same time, more money is flowing toward currencies

that are expected to benefit from a pick-up in global trade and

to countries that are bouncing back quickly from the coronavirus

pandemic, which is also weighing on the dollar.

“Signs of economic recovery are lifting commodities prices,

which in turn supports currencies of commodities exporters,”

said Junichi Ishikawa, foreign exchange strategist at IG

Securities.

“Risk appetite has improved a lot, and this leaves the

dollar at a big disadvantage.”

The Australian dollar, which tends to benefits from

rising metal and energy prices, traded near a three-year high.

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The British pound rose to $1.4120, the highest

since April 2018.

The outlook for sterling has brightened as investors cheer

Britain’s rapid coronavirus vaccination program and its plans

to ease lockdown restrictions on economic activity.

Against the euro, the dollar traded at $1.2153,

close to a six-week low.

The dollar held steady at 105.29 Japanese yen.

Powell pushed back against suggestions that loose monetary

policy will lead to runaway inflation and financial bubbles,

which have emerged as two important themes this year, because

there is growing skepticism about the rapid pace of gains in

global stocks.

For economies that have limited disruptions caused by the

coronavirus outbreak, their central bankers now face questions

of when to start tightening policy, which makes the dollar look

less attractive, some analysts say.

The Reserve Bank of New Zealand is expected to keep policy

on hold on Tuesday, but three economists in a Reuters poll

expect a rate hike by the end of next year due to a

quicker-than-expected economic recovery.

Ahead of the decision, the New Zealand dollar held

steady at $0.7338, close to a three-year high.

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Currency bid prices at 0012 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar $1.2153 $1.2150 +0.02% -0.53% +1.2155 +1.2143

Dollar/Yen 105.2950 105.2600 +0.05% +1.96% +105.3250 +105.2400

Euro/Yen 127.96 127.86 +0.08% +0.82% +127.9800 +127.7800

Dollar/Swiss 0.9054 0.9054 +0.02% +2.36% +0.9056 +0.9048

Sterling/Dollar 1.4118 1.4112 +0.05% +3.35% +1.4122 +1.4111

Dollar/Canadian 1.2589 1.2590 +0.03% -1.10% +1.2596 +1.2583

Aussie/Dollar 0.7908 0.7909 -0.03% +2.79% +0.7915 +0.7903

NZ 0.7338 0.7343 -0.05% +2.20% +0.7343 +0.7334

Dollar/Dollar

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

(Reporting by Stanley White; editing by Richard Pullin)