FOREX-Dollar marooned as investors shrug off inflation spike - Reuters

    * U.S. CPI leaps to near 13-yr high of 5% y/y
    * Seen as transitory due to one-off pressures; dollar slips
    * "The market believes the Fed" - analyst
    * Graphic: World FX rates tmsnrt.rs/2RBWI5E

    By Tom Westbrook
    SINGAPORE, June 11 (Reuters) - After a week of anxious
waiting, markets got the high U.S. inflation number they
dreaded, shrugged it off and moved on - leaving the U.S. dollar
under pressure and most majors stuck in ranges.
    Early in the Asia session the greenback nursed small losses,
as traders figured there were enough one-offs in last month's
0.6% rise in consumer prices to support the Federal Reserve's
insistence that inflation was likely to be transitory.
    The dollar bought 109.37 yen and was headed for a
small weekly loss. It was also on track for modest weekly losses
on the Aussie dollar and British pound, last trading at $0.7748
per Aussie and $1.4171 per pound.
    A dovish commitment from the European Central Bank to stick
with its elevated tempo of bond buying held the euro
in check at $1.2175.
    "What we're seeing is a market that believes in the Fed,"
said Chris Weston, head of research at broker Pepperstone in
Melbourne, as investors temper worries that the strong recovery
in the United States prompts early rate hikes.    
    "We're going to get tapering," he said. "But it's going to
get done a such a snail's pace."
    The data overnight showed U.S. consumer prices up 5%
year-on-year, the sharpest rise in more than a dozen years and
core inflation surging 0.7% in a month.
    But hefty contributions from short-term rises in airline
ticket prices and used cars helped convince traders it was not
going to drive interest rates higher any time soon.    
    "It basically fit the Fed script, that we'd get a burst but
it's going to be temporary," said Westpac currency analyst Imre
Speizer.
    "This report is consistent with that, it doesn't argue
against it. I think the market needed something that argued
against it to push the U.S. dollar higher."
    The U.S. dollar index fell slightly after the
inflation figures were published and last sat at 90.041, more or
less flat for the week.
    Benchmark 10-year U.S. Treasuries actually rallied to a
three-month high in the wake of CPI, as short sellers
capitulated, and quit bets on rising yields.
    Focus now turns to the Fed's meeting next week, although
traders now say that there may not be much of a shift in
rhetoric which has played down the need to taper stimulus.
    A plan for reducing bond buying is expected to be announced
in August or September a Reuters poll of economists found, but
it isn't forecast to begin until next year.
    Ahead of the onshore trading band fix, China's yuan was
steady at 6.3853 per dollar offshore.
    The South Korean won traded firmly after the central
bank governor hinted at normalising policy, in an advance copy
of a speech to be delivered later on Friday.
    Cryptocurrencies looked to close out the week steady, with
bitcoin seemingly well supported about $35,000
despite more talk of global regulatory scrutiny.
    
    ========================================================
    Currency bid prices at 113 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.2180        $1.2176     +0.03%         -0.31%      +1.2180     +1.2171
 Dollar/Yen                   109.4100       109.3150    +0.00%         +5.83%      +109.4450   +0.0000
 Euro/Yen         <EURJPY=EB  133.24         133.08      +0.12%         +4.98%      +133.2800   +133.1100
                  S>                                                                            
 Dollar/Swiss                 0.8943         0.8946      -0.03%         +1.09%      +0.8950     +0.8943
 Sterling/Dollar              1.4174         1.4176      -0.02%         +3.74%      +1.4178     +1.4170
 Dollar/Canadian              1.2088         1.2095      -0.04%         -5.06%      +1.2098     +1.2090
 Aussie/Dollar                0.7754         0.7753      +0.03%         +0.81%      +0.7757     +0.7747
 NZ                           0.7193         0.7196      -0.04%         +0.17%      +0.7199     +0.7188
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ
    
    

    
 (Reporting by Tom Westbrook.
Editing by Shri Navaratnam)
  

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2021-06-11 01:26:00Z
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