FOREX-Dollar rebound continues as euro plunges - Reuters

 (Updates prices, market activity; new byline, changes dateline,
previous NEW YORK/LONDON)
    * Dollar index on track for biggest one-day gain since June
    * Euro drops down more than 1% against dollar
    * British pound drops 0.8%
    * Moves reverse Thursday action
    * End-of-month position changes a factor 
    * Markets juggle views of central bank rate moves

    By David Henry
    NEW YORK Oct 29 (Reuters) - The dollar continued to rebound
from prior-day losses on Friday as the euro plunged and currency
and bond markets tried to sort through inflation reports and
central bank comments amid end-of-month position adjustments.
    The dollar index was up 1% around noon (1600 GMT) in
New York, more than reversing Thursday's loss of nearly 0.6%.
The move put the dollar on track for its biggest one-day gain
since at least June and near a one-year high reached 17 days
ago.  
    The euro fell more than 1% in its biggest daily percentage
loss since March 2020. On Thursday the euro booked its biggest
daily gain in five months.
    The British pound fell 0.8% to $1.3680. 
    Volatility in the foreign exchange and the interest rate
markets has increased during the week as they tried to digest 
central bank actions and economic reports. Next week could bring
more of the same around policy meetings of the U.S. Federal
Reserve, the Bank of England and the Reserve Bank of Australia.
    "A source of volatility could be this discrepancy between 
what the markets are saying and what the central banks are
saying," said Marc Chandler, chief market strategist at
Bannockburn Global Forex.
    Month-end adjustments of positions are another factor,
Chandler said.
    U.S. Treasury yields rose after the government's index of
core personal consumption expenditures - the Fed's preferred
inflation measure - climbed 0.2% in September, showing an
increase of 3.6% over 12 months.
    U.S. interest rate markets have been unusually volatile as
traders prepare for the Federal Reserve to raise rates around
mid-2022.
    European data on Friday showed inflation in the 19 countries
sharing the euro rose to 4.1% in October from 3.4% a month
earlier, beating a consensus forecast of 3.7% and creating a
policy dilemma for the European Central Bank.
    Germany's 10-year bond yield rose on Friday as much as 8
basis points to its highest level since May 2019 and Southern
European government bond yields surged.
    ECB President Christine Lagarde's failure during a Thursday
press conference to push back against market expectations of
higher interest rates has brought out bears, with Danske Bank
strategists expecting the euro to fall to $1.10 over the next 12
months.
    "Investors are just not buying what the ECB is saying," said
Marios Hadjikyriacos, a senior investment analyst at brokerage
XM. Markets are betting that inflation will force the ECB to
pull back on asset purchases sooner than planned.
    Elsewhere, the dollar gained 0.4% against the Japanese yen
to 114.065.  
    The Australian dollar slipped nearly 0.5% to
$0.7509 after reaching the highest since early July at $0.75555
in the previous session.
    In cryptocurrencies, ether rose to a record
$4,400 and was up 3% on the day, while bigger rival bitcoin
 gained 3% to $62,296.    
========================================================
    Currency bid prices at 12:02PM (1602 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index                 94.2420        93.3620     +0.96%         4.735%        +94.2560    +93.3200
 Euro/Dollar                  $1.1543        $1.1683     -1.19%         -5.52%        +$1.1690    +$1.1543
 Dollar/Yen                   114.0650       113.5600    +0.45%         +10.40%       +114.0850   +113.3950
 Euro/Yen                     131.65         132.69      -0.78%         +3.73%        +132.9100   +131.6800
 Dollar/Swiss                 0.9167         0.9120      +0.53%         +3.62%        +0.9176     +0.9103
 Sterling/Dollar              $1.3680        $1.3795     -0.82%         +0.14%        +$1.3804    +$1.3681
 Dollar/Canadian              1.2404         1.2342      +0.50%         -2.59%        +1.2407     +1.2328
 Aussie/Dollar                $0.7509        $0.7545     -0.46%         -2.37%        +$0.7555    +$0.7501
 Euro/Swiss                   1.0581         1.0652      -0.67%         -2.09%        +1.0655     +1.0571
 Euro/Sterling                0.8436         0.8472      -0.42%         -5.61%        +0.8473     +0.8435
 NZ                           $0.7154        $0.7205     -0.61%         -0.28%        +$0.7201    +$0.7137
 Dollar/Dollar                                                                                    
 Dollar/Norway                8.4605         8.3295      +1.47%         -1.57%        +8.4660     +8.3410
 Euro/Norway                  9.7674         9.7373      +0.31%         -6.68%        +9.7951     +9.7285
 Dollar/Sweden                8.6004         8.5082      -0.16%         +4.93%        +8.6014     +8.5073
 Euro/Sweden                  9.9275         9.9439      -0.16%         -1.48%        +9.9624     +9.9261
 

    
 (Reporting by David Henry in New York and Saikat Chatterjee in
London. Editing by Angus MacSwan and Raissa Kasolowsky)
  

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https://www.reuters.com/article/global-forex/forex-dollar-rebound-continues-as-euro-plunges-idUSL1N2RP1XE

2021-10-29 16:29:00Z
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