US dollar slips as dovish Fed comments weigh; yen | Money News

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The U.S. dollar dipped on Monday, as traders weighed dovish remarks from Federal Reserve officers that boosted expectations for a price cut subsequent month and restricted the buck’s upside towards main currencies.

The U.S. currency, nevertheless, rose towards the yen, as traders remained on ​the lookout for indicators of official shopping for from Tokyo to stem the slide within the Japanese currency.

Volume was thinner than regular attributable to a vacation ‌in Japan and a holiday-thinned week within the U.S. with the upcoming Thanksgiving vacation on Thursday.

In afternoon trading, the euro rose 0.1% towards 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 barely prolonged its fall after Fed Governor Christopher Waller mentioned on Monday that out there knowledge confirmed the U.S. job market stays weak enough to warrant one other quarter-point price cut on the U.S. central bank’s December 9-10 coverage assembly.

His remarks adopted these of New York Fed President John Williams on Friday who mentioned that the U.S. central bank can nonetheless cut rates of interest “in the near term” with out placing its inflation purpose at risk.

Following their comments, Fed fund futures have ⁠elevated the possibilities of an rate of interest cut of a ‌quarter-point subsequent month to 80%, from 30% earlier than their remarks, in line with the CME’s FedWatch software.

Several regional Fed governors, nevertheless, argued for delaying additional easing till there’s clear proof that inflation is on observe to fall to the Fed’s 2% goal from a ‍still-elevated degree.

“There’s a bifurcation within the Fed right now — those focusing on backward-looking data versus those that are forward-looking,” mentioned Eugene Epstein, head of trading and structured merchandise at Moneycorp in New Jersey.

“Certainly, interest rate fundamentals move currencies.”

He famous, although, that there have been occasions that the dollar has not moved according to expectations — when the Fed is slicing charges, the dollar must be ​falling.

Markets are additionally gearing up for potential catalysts, together with the release of U.S. retail gross sales and producer costs knowledge due later within the week.

YEN WOES, STERLING FLAT

The ‌yen fell towards the dollar, which rose 0.2% to 156.755 yen, simply shy of its 10-month high hit final week of 157.90..

Japan’s currency has been sliding on a mixture of looser fiscal insurance policies and a few of the bottom rates of interest on the planet, prompting merchants to ask whether or not Japanese authorities would possibly step in to stop their currency weakening additional.