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FOREX-Dollar sluggish but steady, oil bounce supports commodity currencies
June 23, 2017 / 12:26 AM / in 5 months

FOREX-Dollar sluggish but steady, oil bounce supports commodity currencies

* Dollar drifts, next week’s US data awaited for inflation cues

* Canadian dollar, Norwegian crown holds to gains after oil bounce

By Shinichi Saoshiro

TOKYO, June 23 (Reuters) - The dollar was little changed early on Friday as traders marked time ahead of next week’s U.S. inflation-linked indicators, while commodity currencies like the Canadian dollar held to gains following a bounce in crude oil prices.

The dollar index against a basket of major currencies stood little changed at 97.547.

The index peaked at a one-month high of 97.871 early in the week after the Federal Reserve hiked interest rates last week and left the door open for further monetary tightening later in the year. But it has been stuck in a tight range since, awaiting fresh catalysts.

“While the market was able to draw incentives from the Fed last week, there really was not a lot of factors for the dollar to move on this week in the absence of major indicator releases and political events,” said Shin Kadota, a senior strategist at Barclays in Tokyo.

“But inflation is likely to be the theme that moves currencies next week which will see the release of various U.S. indicators. They will be key as this week’s slump in crude oil has clouded the U.S. inflation outlook.”

U.S. data due next week include the June consumer confidence indicator, pending home sales, crude oil inventories, revised first quarter GDP and the PCE price index.

The dollar was flat at 111.290 yen. It had scaled a near one-month peak of 111.790 on Tuesday before edging down in tandem with U.S. yields, which were nudged lower by falling oil prices.

The euro was also steady, at $1.1150. It was poised to lose about 0.4 percent this week.

Commodity linked currencies held to significant gains made overnight following a rebound in crude oil prices from 10-month lows.

The Canadian dollar was flat at C$1.3235 per dollar after rallying 0.75 percent on Thursday.

The loonie also received a helping hand from solid domestic retail sales which boosted expectations for an interest rate hike in July from the Bank of Canada.

The Norwegian crown was little changed at 8.4894 crowns per dollar after rising about 0.5 percent overnight. The crown was also supported as Norway’s central bank lifted its rate forecasts for 2017 and 2018 and said a rate cut was no longer likely.

The Australian and New Zealand dollars were both flat at $0.7541 and $0.7263, respectively. (Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam)

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