FOREX-Dollar edges higher as Fed debate over inflation continues

Reuters

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    * Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

 (Adds data, Fed speakers, updates prices)
    By Karen Brettell
    NEW YORK, June 23 (Reuters) - The dollar ended higher on Wednesday as two Federal Reserve officials said
that a period of high inflation in the United States could last longer than anticipated, a day after Fed
Chair Jerome Powell played down rising price pressures.
    Atlanta Fed President Raphael Bostic said with growth surging to an estimated 7% this year and inflation
well above the Fed's 2% target, he now expects interest rates will need to rise in late 2022.
    Both Bostic and Fed Governor Michelle Bowman on Wednesday said that while they largely agree recent
price increases will prove temporary, they also feel it may take longer than anticipated for them to fade.
 urn:newsml:reuters.com:*:nL2N2O5161
    The dollar jumped after the Fed surprised markets on June 16 by saying that policymakers are forecasting
two interest rate hikes in 2023.
    But Powell on Tuesday said that prices are rising due to a "perfect storm" of rising demand for goods
and services and bottlenecks in supplying them as the economy reopens from the pandemic and that those price
pressures should ease on their own.  urn:newsml:reuters.com:*:nL2N2O31WU
    “Dollar gains have faded after Mr. Powell downplayed higher inflation lasting for very long,” said Joe
Manimbo, senior market analyst, at Western Union Business Solutions in Washington.
    That said, “if we see signs of inflation pushing further higher, I think that could go some way in
stirring inflation jitters all over again and putting the focus on Fed policy,” Manimbo said.
    The dollar index  USD=  gained 0.06% to 91.798, but is holding below two-month highs of 92.408 reached
on Friday.
    The dollar weakened earlier on Wednesday and hit a session low after data showed that sales of new U.S.
single-family homes fell to a one-year low in May as the median price of newly built houses soared amid
expensive raw materials, including framing lumber.  urn:newsml:reuters.com:*:nL2N2O51JE
    Other data showed that a measure of U.S. factory activity climbed to a record high in June.  urn:newsml:reuters.com:*:nL2N2O42C6
    Producer price inflation data on Friday is this week’s U.S. economic focus, with other releases
including jobless claims on Thursday and consumer spending on Friday.
    The euro  EUR=EBS  fell 0.11% to $1.1929.
    Data on Wednesday showed that euro zone business growth accelerated at its fastest pace in 15 years in
June following the easing of more lockdown measures.  urn:newsml:reuters.com:*:nZRN0029TE
    The Japanese yen  JPY=D3  also fell after data showed factory activity expanded at the slowest pace in
four months in June.  urn:newsml:reuters.com:*:nZRN0029ST
    The dollar gained 0.29% to 110.66 yen  JPY=D3 , after earlier reaching 111.10 yen, the highest since
March 2020.
    Currencies correlated to the global economic cycle, including the Kiwi dollar and Norway's crown,
outperformed on Wednesday.
    Elsewhere, bitcoin was up around 2.78% on the day at $33,467  BTC=BTSP , after dropping to as low as
$28,600 on Tuesday - its lowest since January.
    
    ========================================================
    Currency bid prices at 3:01PM (1901 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index      =USD       91.7980        91.7460     +0.06%         2.019%        +91.9000    +91.5090
 Euro/Dollar       EUR=EBS    $1.1929        $1.1942     -0.11%         -2.37%        +$1.1970    +$1.1911
 Dollar/Yen        JPY=D3     110.9600       110.6600    +0.28%         +7.44%        +111.0950   +110.6400
 Euro/Yen          EURJPY=    132.35         132.14      +0.16%         +4.28%        +132.6900   +132.0400
 Dollar/Swiss      CHF=EBS    0.9184         0.9183      +0.01%         +3.80%        +0.9200     +0.9154
 Sterling/Dollar   GBP=D3     $1.3964        $1.3946     +0.14%         +2.22%        +$1.4001    +$1.3924
 Dollar/Canadian   CAD=D3     1.2302         1.2308      -0.03%         -3.38%        +1.2328     +1.2253
 Aussie/Dollar     AUD=D3     $0.7573        $0.7556     +0.23%         -1.56%        +$0.7599    +$0.7539
 Euro/Swiss        EURCHF=    1.0955         1.0962      -0.06%         +1.37%        +1.0968     +1.0949
 Euro/Sterling     EURGBP=    0.8540         0.8557      -0.20%         -4.44%        +0.8565     +0.8531
 NZ                NZD=D3     $0.7041        $0.7021     +0.31%         -1.92%        +$0.7069    +$0.6998
 Dollar/Dollar                                                                                    
 Dollar/Norway     NOK=D3     8.5315         8.5395      -0.28%         -0.83%        +8.5610     +8.4800
 Euro/Norway       EURNOK=    10.1774        10.1919     -0.14%         -2.77%        +10.2167    +10.1355
 Dollar/Sweden     SEK=       8.4857         8.4752      +0.12%         +3.53%        +8.4970     +8.4568
 Euro/Sweden       EURSEK=    10.1243        10.1120     +0.12%         +0.48%        +10.1395    +10.1088
    

 (Reporting by Karen Brettell; additional reporting by Saikat Chatterjee in London; editing by Jonathan
Oatis and Marguerita Choy)
 ((karen.brettell@thomsonreuters.com))

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