FOREX-Dollar looks stronger as euro and sterling dip


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    * Dollar index gains, Euro and pound fall 
    * Currency markets look head to Fed meeting
    * Graphic: World FX rates

 (Updates prices, adds commentary, changes byline, previous
dateline London)
    By Sinéad Carew
    NEW YORK, June 11 (Reuters) - The euro and sterling dipped
against the dollar on Friday as investors bet interest rates
would stay lower for longer in Europe, a day after currency
markets shrugged off a high U.S. inflation number as likely to
be temporary.
    The dollar index  =USD  was last up 0.46% at 90.4790 while
the euro was down 0.53% at $1.2112. 
    A day after the European Central Bank stuck to its dovish
stance, ECB policymaker Klaas Knot said that flexible fiscal
rules would be needed for years as monetary policy remains
    "ECB policy makers are indicating that inflation rates are
way below levels that are needed to put upward pressure on
rates," said Karl Schamotta, chief market strategist at
Cambridge Global Payments in Toronto.
    "That's cutting away at the euro's recent rally, putting
some downward pressure on it. The biggest contributor to the
move we've seen overnight is the (euro) weakness as opposed to
idiosyncratic dollar positive forces. The dollar's winning the
reverse beauty contest."
    Sterling  GBP=D3  was down 0.43% at $1.4115, also dented by
the rapid spread of the Delta variant in Britain, raising
concerns that much of the country may not be able to fully
reopen from lockdown on June 21, as planned.*:nL5N2NT2WT*:nL2N2NT0MX
    "You're seeing sterling weaken at the possibly of a delayed
reopening," Schamotta added. "That certainly weighs on the
likelihood of a full and rapid rebound, particularly on the
consumption side. It lowers estimates and pushes Bank of England
tightening even further into the future."
    Currency markets had been sluggish all week in anticipation
of Thursday's release of U.S. consumer prices, which rose 5%
year-on-year in May.
    But even though the number was above expectations, there was
little market reaction. Investors seemed to agree with the
Federal Reserve's assertion that any rise in inflation to be
temporary and that it is too soon to be discussing reducing its
monetary stimulus.*:nL2N2NR2Q5
    Traders were however, looking ahead to the Federal Open
Market Committee meeting scheduled for the week ahead.
Economists see the central bank announcing in August or
September a strategy for reducing its massive bond-buying
program, but don't expect it to  start cutting monthly purchases
until early next year, a Reuters poll found.*:nL3N2NR3I0  
    Meanwhile investor left riskier currencies such as the
Australian dollar  AUD=D3  was down 0.63% against the U.S.
dollar and the New Zealand dollar was off 0.92% at $0.7129. 
    In cryptocurrencies, bitcoin, which recovered slightly in
recent sessions, was on track for a 4% weekly gain and last up
1.6% at $37,288 on the day. Ether however was last down 0.4% and
set for a 9% weekly drop  BTC=BTSP   ETH=BTSP . Both are still
trading significantly below their earlier peaks.
    Currency bid prices at 10:18AM (1418 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
 Dollar index      =USD       90.4790        90.0740     +0.46%         0.553%        +90.4930    +89.9510
 Euro/Dollar       EUR=EBS    $1.2112        $1.2176     -0.53%         -0.87%        +$1.2193    +$1.2111
 Dollar/Yen        JPY=EBS    109.7600       109.3300    +0.40%         +6.23%        +109.7650   +109.3000
 Euro/Yen          EURJPY=    132.95         133.08      -0.10%         +4.75%        +133.4100   +132.8500
 Dollar/Swiss      CHF=EBS    0.8986         0.8946      +0.44%         +1.56%        +0.8986     +0.8933
 Sterling/Dollar   GBP=D3     $1.4115        $1.4176     -0.43%         +3.32%        +$1.4185    +$1.4114
 Dollar/Canadian   CAD=D3     1.2138         1.2095      +0.37%         -4.67%        +1.2140     +1.2080
 Aussie/Dollar     AUD=D3     $0.7704        $0.7753     -0.63%         +0.15%        +$0.7775    +$0.7704
 Euro/Swiss        EURCHF=    1.0882         1.0892      -0.09%         +0.69%        +1.0901     +1.0881
 Euro/Sterling     EURGBP=    0.8580         0.8587      -0.08%         -3.99%        +0.8605     +0.8569
 NZ                NZD=D3     $0.7129        $0.7196     -0.92%         -0.71%        +$0.7210    +$0.7130
 Dollar/Norway     NOK=D3     8.3465         8.2620      +1.05%         -2.77%        +8.3490     +8.2650
 Euro/Norway       EURNOK=    10.1096        10.0700     +0.39%         -3.41%        +10.1121    +10.0611
 Dollar/Sweden     SEK=       8.3140         8.2484      +0.35%         +1.43%        +8.3168     +8.2368
 Euro/Sweden       EURSEK=    10.0710        10.0362     +0.35%         -0.05%        +10.0734    +10.0409

World FX rates
US 10-year yield poised for biggest1-week drop in a year
 (Additional reporting by Elizabeth Howcroft in London; Editing
by Emelia Sithole-Matarise and Pravin Char)
 ((; +1 (646) 223 6186; Reuters

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