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Fed's Waller says December cut appropriate
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US rate cut odds at nearly 80%
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Yen intervention possible in holiday-thinned week
(Recasts, adds new comment, FX table, NEW YORK dateline,
byline, updates prices)
By Gertrude Chavez-Dreyfuss and Ozan Ergenay
NEW YORK/LONDON, Nov 24 (Reuters) -
The U.S. dollar traded narrowly mixed on Monday, as
investors weighed dovish remarks from Federal Reserve officials
that boosted expectations for a rate cut next month, limiting
the greenback's upside against some of the major currencies such
as the euro and Swiss franc.
The U.S. currency, however, rose against the yen, as
investors remained on the lookout for signs of official buying
from Tokyo to stem the slide in the Japanese currency. The
dollar also slightly gained versus commodity currencies such as
the Australian and New Zealand units.
Volume was thinner than normal due to a holiday in
Japan.
In mid-morning trading, the euro rose 0.1%
against the dollar to $1.1527, which put the dollar index down
0.1% at 100.17. Against the Swiss franc, the dollar slid
0.2% to 0.8074 franc.
Fed Governor Christopher Waller said on Monday that
available data showed the U.S. job market remains weak enough to
warrant another quarter-point rate cut
at the U.S. central bank's December 9-10 policy meeting.
His remarks followed those of New York Fed President
John Williams on Friday who said that the U.S. central bank
can still cut
interest rates "in the near term" without putting its
inflation goal at risk.
Following their comments, Fed fund futures have
increased the chances of an interest rate cut of a quarter-point
next month to a nearly 80% chance, from 30% before their
remarks, according to the CME's FedWatch tool.
Several regional Fed governors, however, argued for
delaying further easing until there is clear evidence that
inflation is on track to fall to the Fed's 2% target from a
still-elevated level.
"While the odds have crept up a little bit more today in
favor of a rate cut next month, it seems to be having just a
little impact on the dollar, which means that it's a bit of an
open question," said Marc Chandler, chief market strategist at
Bannockburn Global in New York.
Markets are also gearing up for potential catalysts,
including the release of U.S. retail sales and producer prices
data due later in the week.
YEN WOES, STERLING FLAT
The yen on Monday was the worst performer against the
dollar, which rose 0.4% to 157.07 yen, just shy of its 10-month
high hit last week of 157.90..
Japan's currency has been sliding on a combination of
looser fiscal policies and some of the lowest interest rates in
the world, prompting traders to ask whether Japanese authorities
might step in to stop their currency weakening further.
The yen, however, managed to gain some ground last Friday,
bouncing from 10-month lows after Finance Minister Satsuki
Katayama stepped up verbal intervention warnings to stem the
currency's decline.
Traders see a risk of intervention somewhere between 158 and
162 yen per dollar, with Thanksgiving-thinned trade later in the
week a possible window for authorities to step in.
Japan can actively intervene in the currency market to
mitigate the negative economic impact of a weak yen, Takuji
Aida, a private-sector member of a key government panel, said in
a television program on public broadcaster NHK on Sunday.
Nick Rees, head of macro research at Monex Europe, said
intervention would help slow the rise of the dollar against the
yen but would not derail it completely, given that the dynamics
underpinning such a move were unlikely to change anytime soon.
In other currency pairs, sterling was marginally
softer at $1.3085 against the dollar ahead of Wednesday's budget
announcement. Finance minister Rachel Reeves is seeking a
balance between spending to support faltering growth and
demonstrating to investors that Britain can meet its fiscal
targets.
Cryptocurrency markets steadied over the weekend, but
pressure resumed on bitcoin, which was down 1.8% at
$86,431.78.
Currency
bid
prices
at 24
November
03:45
p.m. GMT
Descript RIC Last U.S. Pct YTD High Low
ion Close Chang Pct Bid Bid
Previous e
Session
Dollar % .01
Euro/Dol 3
Dollar/Y 5 .67
4
Euro/Yen Dollar/S Sterling % 8 308
2?
Dollar/C 093
Aussie/D 644
2
Euro/Swi Euro/Ste NZ % 8 598
ollar
Dollar/N ? 3 213
3
Euro/Nor Dollar/S % 259
Euro/Swe
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