FOREX-Dollar jumps after Fed official's taper talk stirs markets - Reuters

    * Dollar rises off one-week lows ahead of Jackson Hole
summit
    * Korean won falls after rate hike 
    * Implied euro-dollar volatility at one-week low 
    * Graphic: World FX rates tmsnrt.rs/2RBWI5E

 (Adds Bullard comments, fresh prices)
    By Herbert Lash
    NEW YORK, Aug 26 (Reuters) - The dollar jumped from one-week
lows on Thursday after a regional Federal Reserve president
suggested a faster pace of reducing the U.S. central bank's
asset purchases, comments that pushed the greenback toward a key
resistance level.
    The dollar index, which measures the greenback
against a basket of six major trading currencies, was about
0.06% higher just before the remarks by James Bullard, the
president of the St. Louis Fed who is considered a hawk on
policy.
    Bullard said in comments to CNBC that he was skeptical that
inflation would moderate and for that reason the Fed needed to
start tapering its bond-purchasing program. 
    "We have to get going on taper, get the taper finished by
the end of the first quarter of next year. Then we can evaluate
inflation, what the situation is," Bullard said. 
    The dollar index jumped to above 93, a key resistance level,
before easing a bit to trade 0.15% higher at 92.958. On
Wednesday, the index had dropped to 92.801 for the first time
since Aug. 17. 
    The euro was down 0.07% at $1.1762.
    Two weeks ago the dollar index rose above 93 and has been
testing that level since as a support level, said Steven
Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC. 
    The market will likely discount what Bullard said, in part
because he's a non-voting member of the Fed's policy-setting
committee, but "his voice is heard in the room and you have to
assume therefore it does have some impact", he said.  
    "I don't think we're likely to reverse (the dollar's trend
higher) too quickly," he said. 
    
    POWELL EYED
    Bullard's comments came as the Fed's annual symposium in
Jackson Hole, Wyoming opened, with the highlight expected to be
Fed Chair Jerome Powell's speech on Friday. Powell is unlikely
to offer few new hints about when the Fed may start to reduce
its massive asset purchases, analysts said.
    Benchmark 10-year Treasury note yields were last
at 1.356%, after reaching 1.375% following Bullard's comments,
the highest since Aug. 12. 
    The yen traded up 0.09% at $110.0900. 
    Currency market swings have eased ahead of Powell's speech,
with implied euro-dollar volatility at a one-week low
.
    Markets are assessing how the Fed will react to signs
inflation could be less transitory than it had flagged and
whether it will stick to its new policy framework of letting
inflation run hot. 
    Signals of a taper starting this year had lifted the dollar
index to a 9-1/2-month high of 93.734 last Friday.
    Meanwhile, more central banks worldwide are exiting or
contemplating exiting from ultra-easy accommodative policies.
South Korea's central bank on Thursday raised interest rates for
the first time in three years.
    The won gave up initial gains, however, to fall 0.6%
after the hike which had been well-flagged.  
    
========================================================
    Currency bid prices at 10:27AM (1427 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index                 92.9420        92.8180     +0.15%         3.291%        +93.0560    +92.8070
 Euro/Dollar                  $1.1763        $1.1772     -0.08%         -3.73%        +$1.1779    +$1.1749
 Dollar/Yen                   110.1000       110.0000    +0.09%         +6.56%        +110.2200   +109.9250
 Euro/Yen                     129.49         129.45      +0.03%         +2.02%        +129.7600   +129.3100
 Dollar/Swiss                 0.9176         0.9137      +0.43%         +3.72%        +0.9192     +0.9136
 Sterling/Dollar              $1.3724        $1.3764     -0.28%         +0.46%        +$1.3767    +$1.3710
 Dollar/Canadian              1.2627         1.2590      +0.31%         -0.83%        +1.2632     +1.2587
 Aussie/Dollar                $0.7255        $0.7275     -0.28%         -5.69%        +$0.7279    +$0.7250
 Euro/Swiss                   1.0790         1.0754      +0.33%         -0.16%        +1.0805     +1.0750
 Euro/Sterling                0.8569         0.8551      +0.21%         -4.12%        +0.8574     +0.8551
 NZ                           $0.6962        $0.6974     -0.10%         -2.98%        +$0.6976    +$0.6948
 Dollar/Dollar                                                                                    
 Dollar/Norway                8.8090         8.7980      +0.13%         +2.59%        +8.8275     +8.8030
 Euro/Norway                  10.3621        10.3690     -0.07%         -1.00%        +10.3888    +10.3520
 Dollar/Sweden                8.7087         8.6809      +0.26%         +6.25%        +8.7193     +8.6777
 Euro/Sweden                  10.2435        10.2166     +0.26%         +1.66%        +10.2463    +10.2221
 
    
 (Reporting by Sujata Rao; additional reporting by Kevin
Buckland in Tokyo; Editing by Kirsten Donovan and Emelia
Sithole-Matarise)
  

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https://www.reuters.com/article/global-forex/forex-dollar-jumps-after-fed-officials-taper-talk-stirs-markets-idUSL1N2PX159

2021-08-26 14:44:00Z
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