*
Fed's Waller says December cut appropriate
*
Fed's Daly also says she supports easing next month
*
US rate cut odds at 80% for December meeting
*
Yen intervention possible in holiday-thinned week
(Recasts, adds new comment, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, Nov 24 (Reuters) -
The U.S. dollar dipped on Monday, as investors weighed dovish
remarks from Federal Reserve officials that boosted expectations for a
rate cut next month and limited the greenback's upside against major
currencies.
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.
Volume was thinner than normal due to a holiday in Japan and a
holiday-thinned week in the U.S. with the upcoming Thanksgiving
holiday on Thursday.
In afternoon trading, the euro rose 0.1% against the dollar
to $1.1526, which put the dollar index down 0.1% at 100.15.
Against the Swiss franc, the dollar slid 0.1% to 0.8079 franc.
The dollar slightly extended its fall after 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 80%,
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.
"There's a bifurcation within the Fed right now -- those focusing
on backward-looking data versus those that are forward-looking," said
Eugene Epstein, head of trading and structured products at Moneycorp
in New Jersey.
"Certainly, interest rate fundamentals move currencies."
He noted, though, that there were times that the dollar has
not moved in line with expectations -- when the Fed is cutting rates,
the dollar should be falling.
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 fell against the dollar, which rose 0.2% to 156.755 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 on Thursday 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.
"I think if Japan wanted to intervene, this would have been a
good day to do it and would have caught the market by surprise with
Japan on holiday," said Marc Chandler, chief market strategist at
Bannockburn Global in New York.
"The fact that they did not intervene today suggested that the
bar is still high for intervention."
In other currency pairs, sterling was marginally higher at
$1.3108 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, meanwhile, steadied over the weekend.
Bitcoin rose 0.6% to $88,495.19, lifted by more Fed officials'
easing remarks on Monday.
San Francisco Fed President Mary Daly reiterated her view that she
supports a December rate cut, noting that she's not confident that the
central bank can get ahead of a weak labor market.
Currency
bid
prices at
24
November?
08:15
p.m. GMT
Descripti RIC Last U.S. Pct YTD Pct High Low
on Close Change Bid Bid
Previous
Session
Dollar 01
Euro/Doll 503
Dollar/Ye 674
Euro/Yen 2
Dollar/Sw 61
Sterling/ 081?
Dollar/Ca 93
Aussie/Do 442
Euro/Swis 02
Euro/Ster 87
NZ 98
llar
Dollar/No 133
Euro/Norw 82
Dollar/Sw 59
Euro/Swed 86
Print
