By Tom Westbrook
SINGAPORE, Aug 21 (Reuters) - The dollar began on a firm
footing on Monday, following five straight weeks of gains, as
investors looked ahead to Federal Reserve's Jackson Hole
symposium for a guide on where rates might settle when the dust
of this hiking cycle clears.
The dollar made a gain of 0.7% on the euro last
week, inched ahead on the yen and surged by more than 1% on the
Antipodean currencies as U.S. Treasury yields leapt in
anticipation of interest rates staying higher for longer.
In early trade, the Australian dollar, steady at
$0.6409, was just above last week's nine-month low of $0.6365
and the New Zealand dollar was pinned at $0.5923, also
uncomfortably close to last week's low of $0.5903.
They have suffered a double blow lately as in both countries
central banks have indicated they are on hold, and both are
exposed, via exports, to China where market fears about the
slowing economy have swelled as property problems deepened.
"The Australian dollar will continue to underperform this
week in our view," said strategists at the Commonwealth Bank of
Australia in a note to clients.
"We consider there is a growing risk that the Aussie dips
below $0.60 before year-end. It will likely take a big Chinese
stimulus package focused on commodity-intensive infrastructure
spending to turn around the downtrend."
China vowed financial support on the weekend to resolve
local government debt problems but details were light and in the
absence of more concrete promises traders are starting to lose
faith that Beijing will ride to the rescue.
For China the focus on Monday is on an expected cut to
lending benchmarks. The yuan steadied at 7.3084 per
dollar in offshore trade, having bounced off last week's lows
when state banks stepped in as buyers during London and New York
hours.
The yen is also on intervention-watch, having
fallen to levels around which authorities stepped in last year.
It was steady at 145.19 per dollar in early trade.
The euro held at $1.0883. Sterling hovered at
$1.2738. The Swiss franc was just above a six-week low
made last week at 0.8817 per dollar.
Apart from waiting for news of stimulus in China, the
upcoming Jackson Hole symposium - where Fed chair Jerome Powell
is due to speak on Friday - is markets' major focus and may set
the direction for U.S. yields.
Ten-year yields rose 14 basis points for the
week and touched a 10-month high of 4.328%, within a whisker of
a 15-year high. Thirty-year yields rose nearly 11
bps to their highest in more than a decade.
The theme this year for the annual gathering in Wyoming is
"structural shifts in the global economy".
"Two things that may come across are: decades of ultra-low
rates backed by ultra-low inflation may be over," said Vishnu
Varathan, head of economics and strategy at Mizuho Bank in
singapore.
"And global policy-makers may prefer to maintain restrictive
real rates for a while, thereby keeping risks from volatile
inflation alive."
Bitcoin, which was battered to a two-month low
last week as rising U.S. yields and China's slowing economy
drove a wave of selling, nursed those losses at $26,129.
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Currency bid prices at 0033 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar
$1.0882 $1.0873 +0.10% +1.57% +1.0883 +1.0872
Dollar/Yen
145.1800 145.3300 +0.00% +10.74% +145.4150 +0.0000
Euro/Yen 157.99 158.03 -0.03% +12.61% +158.1500 +157.9700
Dollar/Swiss
0.8815 0.8828 -0.15% -4.67% +0.8825 +0.8814
Sterling/Dollar
1.2747 1.2736 +0.02% +5.33% +1.2749 +1.2735
Dollar/Canadian
1.3539 1.3551 -0.07% -0.05% +1.3553 +1.3542
Aussie/Dollar
0.6414 0.6405 +0.14% -5.90% +0.6418 +0.6407
NZ
Dollar/Dollar 0.5927 0.5924 +0.10% -6.61% +0.5936 +0.5923
All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Tom Westbrook. Editing by Sam Holmes)