Dollar drifts below one-year high as payrolls test looms large
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TOKYO – The U.S. dollar drifted below a one-year high versus major peers on Tuesday as traders waited on key U.S. payrolls data at the end of the week for clues on the timing of a tapering of Federal Reserve stimulus and the start of interest rate hikes.
The Australian dollar maintained a three-day gain, trading little changed at $0.72905 from the day earlier, when it touched a four-day high of $0.73045. The Reserve Bank of Australia meets on Tuesday, with economists polled by Reuters unanimously predicting no change to the policy rate.
The New Zealand dollar held close to the previous session's four-day high of $0.6981, changing hands at $0.6960 after three days of gains. Markets are priced for a quarter point rate hike when the nation's central bank decides policy on Wednesday.
DOLLAR DRIFTS AS SOFT INFLATION RAISES TAPER TIMING QUESTIONS
The U.S. dollar index, which measures the currency against six rivals, was about flat at 93.845, easing back slightly since peaking Thursday at 94.504, its highest since late September 2020.
That followed a rally of as much as 2.8% since Sept. 3 as traders rushed to price in tapering as soon as next month and possible rate rises next year, while the currency also benefited from safe-haven demand amid worries spanning the risk of global stagflation to the U.S. debt ceiling standoff.