FOREX-Dollar rally sputters as Fed sends mixed signals on inflation


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    * Dollar index wavers below 11-week high amid deluge of Fed
    * Bostic, Bowman say inflation pressures may last some time
    * New York Fed's Williams among six officials speaking
    * Yen extends losses, hitting 15-month low of 111.11 per

    By Kevin Buckland
    TOKYO, June 24 (Reuters) - The U.S. dollar vacillated below
an 11-week high versus major peers on Thursday as traders
attempted to navigate conflicting signals from Federal Reserve
officials on the timing of a withdrawal of monetary stimulus.
    The dollar index  =USD , which measures the greenback
against six rivals, stood at 91.806 early in the Asian session
after dipping to 91.509 on Wednesday. It was at 92.408 at the
end of last week, the highest since April 9.
    The U.S. currency got some support overnight as two Fed
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 said that while
they largely agree recent price increases will prove temporary,
they also feel it may take longer than anticipated for them to
    The dollar index jumped as much as 2.1% last week after the
Fed surprised markets on June 16 by saying that policymakers are
forecasting two interest rate hikes in 2023.
    But the index gave up about a third of those gains after
Powell on Tuesday said that inflation is climbing due to a
"perfect storm" as the economy reopens from the COVID-19
pandemic, and that those price pressures should ease on their
    Six Fed officials are due to speak on Thursday, including
New York Fed President John Williams, who on Tuesday said any
conversation about when to adjust interest rates is still far
    "The market has shifted back into price discovery mode,
reflecting the Fed's recent shift and the need to fine-tune the
taper lift-off date," Mark McCormick, the global head of
foreign-exchange strategy at TD Securities, wrote in a client
    "Good U.S. data will be good for the USD and bad for risk
markets, owing to the impact on the tapering process.
Accordingly, we still like USD dip-buying into the early parts
of the summer."
    Producer price inflation data on Friday is this week’s U.S.
economic focus, with consumer spending numbers also due that
day, and the latest reading on jobless claims released later on
    The euro  EUR=EBS  was little changed at $1.19295 on
Thursday compared to the previous session, when it rose as high
as $1.19700 for the first time in a week. It had dipped to the
lowest since April 6 on Friday, at $1.18470.
    The yen  JPY=EBS  weakened as far as 111.11 per dollar for
the first time in 15 months, and was last 0.1% weaker at 111.03.
    Currency bid prices at 0104 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar       EUR=EBS    $1.1931        $1.1927     +0.03%         -2.35%      +1.1934     +1.1925
 Dollar/Yen        JPY=EBS    110.9900       110.9750    +0.04%         +7.48%      +111.1100   +111.0200
 Euro/Yen         <EURJPY=EB  132.41         132.32      +0.07%         +4.33%      +132.5700   +132.3400
 Dollar/Swiss      CHF=EBS    0.9182         0.9181      +0.04%         +3.82%      +0.9188     +0.9181
 Sterling/Dollar   GBP=D3     1.3962         1.3966      -0.02%         +2.20%      +1.3968     +1.3961
 Dollar/Canadian   CAD=D3     1.2304         1.2307      -0.02%         -3.37%      +1.2307     +1.2302
 Aussie/Dollar     AUD=D3     0.7575         0.7577      -0.03%         -1.54%      +0.7580     +0.7571
 NZ                NZD=D3     0.7048         0.7047      +0.06%         -1.81%      +0.7051     +0.7044
All spots  FX= 
Tokyo spots  AFX= 
Europe spots  EFX=  
Volatilities  FXVOL=  
Tokyo Forex market info from BOJ  TKYFX  

World FX rates
 (Reporting by Kevin Buckland; Editing by An Nicolaci da Costa)

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