Dollar falls close to one-month low to yen ahead of U.S. inflation data

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Dollar falls close to one-month low to yen ahead of U.S. inflation data

The dollar was against major peers on Wednesday, after weakening in the past three days, and traded close to a one-month low to the yen, with investors awaiting U.S. inflation data for a clue to when the Federal Reserve might raise interest rates.

The safe-haven yen has gained from a record peak as oil prices stocks stocked stocks stocked stocks stocks stocked at a record peak.

Fears of potential contagion from China's property market woes fuelled the search for safer assets, and the riskier Australian and New Zealand dollars fell.

The dollar went up to its low of 112.73, a level last seen on Oct. 11, when the dollar reached its low of 112.73.

The dollar index, which measures the dollar against six rivals, edged back to 94.053 after the descending from a more than one-year peak at 94.634, which was briefly reached on Friday.

The euro went down 0.13% to $1.15805 but held on to most of a three-day gain that had brought it close to the month's high of $1.16165.

The U.S. consumer price index data for October will be released later in the global day. Economists polled by Reuters expect a 0.4% rise in the October index, beating from a 0.2% rise in the previous month, with the core measure gaining 0.3 percentage point to 4.3%, well above the Fed's annual 2% inflation target.

The Fed and other areas are still holding to the view that current high prices will be transitory as global inflation readings are under close scrutiny, with policy makers at the Fed and elsewhere still holding to the view that current high prices will be transitory.

We need to see aprint of 0.8% month-on month to see the dollar index break out of the top of 94.50, said Chris Weston, head of research at Pepperstone in Melbourne, in a client note.

He wrote that the dollar has been rising lower against the yen because if the U.S. CPI comes in hot, this could be a risk to USDJPY shorts.

China's October factory gate prices rose at the fastest pace since 1995, increasing forecasts and further squeezing profit margins for producers that are dealing with soaring coal prices and other commodity costs.

In the October data showed that US producer prices increased strongly, indicating that high inflation could continue amid tight supply chains related to the pandemic.

The Treasury real yield in the U.S. fell sharply as traders hedging against the possibility of rising prices scooped up Treasury Inflation Protected Securities TIPS. Fed officials said that high inflation will become more entrenched than expected.

San Francisco Fed President Mary Daly said that it would be mid 2022 before there is more clarity on the employment and inflation outlook. The forces keeping people out of the labour market and pushing up prices will be temporary, according to Minneapolis Fed President Neel Kashkari.

The Fed Governor Lael Brainard is expected to be a next Fed Chair in the next few days. She would be considered a dovish pick.

The $ Westpac strategists wrote in a research note that brainard would be named as Fed Chair Chipping at the dollar.

The dollar index is a buying opportunity if it goes down to the mid- 93 level, they said.

The pound was stable last week after the Bank of England's surprise decision to keep rates unchanged, and last bought $1.35495, up from Friday's more than one-month low of $1.3425.

The Aussie was at $7.3355 for the first time since October 13 and touched $7.33545 for the first time.

The Fed has released its first direct warning about a potential global damage as a result of concerns about contagion in China's ailing property sector.

Evergrande faces a deadline to pay an offshore bond on Wednesday, and Kaisa Group pleaded on Tuesday for help to pay loans, workers and suppliers.

In cryptocurrencies, the price of bitcoin hovered below its all-time high of $68,564. The last changing hands was at around $66,500 on Tuesday.

Ether traded at $4,712. The Tuesday's record peak is $4,842, and was also within sight of Tuesday's record peak.