HONG KONG Reuters -- Major currencies were holding steady on Wednesday, ahead of another day when central bank policy takes centre stage for traders with a Reserve Bank of New Zealand meeting and Federal Reserve minutes from its recent meeting due to be released.
The dollar index, which tracks the greenback against six main peers, was largely unchanged on Tuesday, at 106.46 in morning trade.
The index recovered most of the ground it lost last week after cooler than expected U.S. inflation, but remains well off its mid July top of 109.29.
If there are things in the minutes that push back against that idea, and that leads to a repricing of the U.S. rate curve for 2023, that could be a catalyst for a reversal of the U.S. dollar weakness that has characterised this last month or so. He said that there is an interest in whether the recent equity market rally will continue, as risk sentiment and the U.S. dollar have been negatively correlated in recent months.
After squeezing out small gains overnight, the euro was steady at $1.0169, and sterling was last fetching $1.2106.
The Japanese yen was at 134.1 in early Asia. The currency gave back some of the gains after being a major beneficiary of the softer dollar, but last week it was as much as 131.7 per dollar.
The New Zealand dollar was steady at $0.6344 ahead of its central bank meeting, while the Australian dollar fell to a one-week low of $0.6988 and was last 0.43% weaker at $0.6993 after data showed growth in wages last quarter lagging economists' forecasts.
The Reserve Bank of New Zealand will deliver a fourth straight half-point rate increase, according to a Reuters poll, which would mark the most aggressive tightening in over two decades as it tried to rein in stubbornly-high inflation.
Markets are so confident that the RBNZ will hike by 50 basis points and continue its hawkish rhetoric, so any divergence from that would likely lead to volatility, Attrill said.
It was back to $24,000, down from a two month high of $25,200 hit Monday.