FOREX-Dollar edges down after inflation data, ahead of FOMC

Reuters

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    * FX volatility at lowest since February 2020
    * With inflation data out, traders look to FOMC meeting
    * Bitcoin holds steady 
    * Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

 (Updates prices, adds commentary)
    By Sinéad Carew
    NEW YORK, June 10  (Reuters) - The dollar index was down
slightly on Thursday after alternating between losses and gains
earlier in the session as investors digested elevated U.S.
inflation and European Central Bank commentary while eyeing the
U.S. Federal Reserve's next meeting.
    After adopting a wait-and-see attitude all week, sucking
volatility from the market and leaving major currencies mostly
range-bound, Thursday's developments appeared to add little new
direction to currency markets.  urn:newsml:reuters.com:*:nL5N2NE5H7
    Earlier in the day, the ECB raised its growth and inflation
views but promised to keep ample stimulus flowing, fearing that
a retreat now would accelerate a worrisome rise in borrowing
costs and choke off recovery.  urn:newsml:reuters.com:*:nL2N2NS0FH
    Then in the United States, data showed that the number of
Americans filing new claims for unemployment benefits fell last
week to the lowest level in nearly 15 months, while consumer
prices increased further in May as the pandemic's easing grip on
the economy continued to boost domestic demand.  urn:newsml:reuters.com:*:nL2N2NR2Q5
    While emerging market currencies such as the Turkish lira
showed more pronounced reactions, dollar traders were already
cautiously looking ahead to the U.S. Federal Open market
Committee (FOMC) policy meeting scheduled for next week.
 urn:newsml:reuters.com:*:nL5N2NS5HQ  urn:newsml:reuters.com:*:nL2N2NS23T
    "The dollar's on the sidelines as it looks for the next key
event risk and that's the FOMC meeting and the prospects the Fed
might begin the talk of tapering, which could provide support to
the dollar," said Paresh Upadhyaya, director of fixed income and
currency strategy at Amundi U.S. 
    Investors were closely watching U.S. consumer prices for any
signs that higher prices could last longer than expected,
potentially challenging the Fed's insistence that inflation
pressures are transitory and that monetary stimulus should stay
in place for some time yet.
    While Upadhyaya sees Thursday's data supporting the U.S.
central bank's stance, he said "a lot of people fearing they
could get chopped up in the price action might just want to
wait" before making big bets. 
    The dollar index  =USD , which measures the greenback
against a basket of major currencies, has fluctuated narrowly
around the psychologically important 90 level, and was last down
0.08% at 90.0670  The euro  EUR=EBS  was last down 0.05% at
$1.2172.
    "You have this tug between the two currencies, and it's
creating a back and forth. That's why you're seeing a little bit
of a cap in terms of dollar weakness and euro strength," said
Minh Trang, senior FX trader at Silicon Valley Bank.
    "The overall trend has been a bit of dollar weakness, not
just because of the robust growth in the U.S. There's been
robust growth overall. A lot of economies have been recovering,"
he said. "When you have optimism in overall global growth,
typically that creates a risk on mentality that's going to favor
other currencies over the dollar."
    Deutsche Bank's Currency Volatility Index  .DBCVIX , was at
its lowest level since February 2020.
    In crypto markets, bitcoin  BTC=BTSP  edged higher, last up
0.4% at $36,563. The best-known crypto currency has struggled
since reaching a record $64,895.22 in mid-April.
        
========================================================
    Currency bid prices at 3:10PM (1910 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index      =USD       90.0670        90.1400     -0.08%         0.096%        +90.3210    +89.9810
 Euro/Dollar       EUR=EBS    $1.2172        $1.2179     -0.05%         -0.38%        +$1.2194    +$1.2144
 Dollar/Yen        JPY=EBS    109.4100       109.6300    -0.19%         +5.90%        +109.7900   +109.4150
 Euro/Yen          EURJPY=    133.18         133.53      -0.26%         +4.93%        +133.7500   +133.1200
 Dollar/Swiss      CHF=EBS    0.8948         0.8960      -0.12%         +1.15%        +0.8991     +0.8942
 Sterling/Dollar   GBP=D3     $1.4170        $1.4114     +0.39%         +3.71%        +$1.4173    +$1.4074
 Dollar/Canadian   CAD=D3     1.2090         1.2110      -0.15%         -5.05%        +1.2124     +1.2070
 Aussie/Dollar     AUD=D3     $0.7755        $0.7731     +0.30%         +0.80%        +$0.7763    +$0.7719
 Euro/Swiss        EURCHF=    1.0892         1.0909      -0.16%         +0.79%        +1.0925     +1.0892
 Euro/Sterling     EURGBP=    0.8590         0.8625      -0.41%         -3.88%        +0.8642     +0.8590
 NZ                NZD=D3     $0.7199        $0.7178     +0.30%         +0.25%        +$0.7212    +$0.7165
 Dollar/Dollar                                                                                    
 Dollar/Norway     NOK=D3     8.2710         8.2775      -0.09%         -3.69%        +8.3450     +8.2700
 Euro/Norway       EURNOK=    10.0707        10.0807     -0.10%         -3.79%        +10.1542    +10.0620
 Dollar/Sweden     SEK=       8.2479         8.2611      -0.21%         +0.63%        +8.2873     +8.2442
 Euro/Sweden       EURSEK=    10.0406        10.0614     -0.21%         -0.36%        +10.0801    +10.0408
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates    https://tmsnrt.rs/2RBWI5E
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Additional reporting by Ritvik Carvalho in London, Kevin
Buckland in Tokyo; Editing by Elaine Hardcastle, Gareth Jones,
Raissa Kasolowsky and Jonathan Oatis)
 ((sinead.carew@thomsonreuters.com; +1 (646) 223 6186; Reuters
Messaging: sinead.carew.thomsonreuters.com@reuters.net))

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