June 21, 2017 / 4:50 PM / 2 months ago

FOREX-Dollar moves sideway after gains, sterling rises

    * Dollar seen getting bump if U.S. tax reform enacted
    * Sterling rebounds after Haldane's rate-hike remarks
    * Falling oil prices pressure commodity-linked currencies

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, June 21 (Reuters) - The dollar was little changed against a basket
of currencies on Wednesday, hovering at a one-month peak as it consolidated
gains from earlier this week on expectations of a possibly another Federal
Reserve interest rate increase later this year.
    Sterling rose after a Bank of England's chief economist Andy Haldane said he
expected to back a rate increase this year. The currency sagged on Tuesday after
BoE Governor Mark Carney said now was not the time to raise UK interest rates
after three policymakers had voted in favor of a hike last week.

    Commodity-linked currencies such as the Canadian dollar and
Norwegian crown fell in step with lower oil prices.
    "The dollar will bump along just like this and perhaps strengthens a bit if
we see tax reform from Washington," said Kristina Hooper, global market
strategist at Invesco in New York.
    Top Republicans from the U.S. Congress and Trump administration vowed on
Tuesday to complete tax reform by the end of 2017.
    The greenback rose earlier this week in reaction to comments from New York
Fed President William Dudley who said a tightening U.S. labor market would
rekindle inflation, which would leave open the possibility of another rate hike
by year-end after two increases so far this year.
    The dollar index was down 0.07 percent at 97.695, slightly below a
one-month high of 97.871 reached on Tuesday.
    The greenback weakened most on the day against the pound following Haldane's
hawkish view, which ran counter to his perceived dovish reputation.
    "If his opinion is shifting then that is potentially significant news for
rates going forward," said Adam Cole, head of FX strategy at RBC Capital Markets
in London.
    Investors were also closely watching political developments, with Prime
Minister Theresa May's Conservative Party still in talks with Northern Ireland's
Democratic Unionists Party (DUP) to form a government.          
    Sterling was down as much as 0.6 percent based on Tuesday's close in New
York before halving that decline, which brought it to $1.2659.
 
    Meanwhile, global benchmark oil prices touched seven-month lows on
Wednesday on worries about oversupply. That put downward pressure on currencies
whose economies are reliant on oil and commodity exports.
    The Norwegian crown hit near a one-month low against the dollar, and
last traded at 8.5376 crowns per dollar, down nearly 0.1 percent on the day.
    The Canadian dollar traded at C$1.3328 per dollar, down 0.5 percent
from late on Tuesday.
========================================================
    Currency bid prices at 12:23PM (1623 GMT)
 Description      RIC         Last           U.S. Close  Pct        YTD Pct
                                              Previous   Change      Change
                                              Session               
 Euro/Dollar      EUR=        $1.1143        $1.1134     +0.08%     +5.99%
 Dollar/Yen       JPY=        111.5100       111.4200    +0.08%     -4.59%
 Euro/Yen         EURJPY=     124.25         124.09      +0.13%     +0.90%
 Dollar/Swiss     CHF=        0.9743         0.9750      -0.07%     -4.27%
 Sterling/Dollar  GBP=        1.2656         1.2629      +0.21%     +2.59%
 Dollar/Canadian  CAD=        1.3323         1.3264      +0.44%     -0.80%
 Australian/Doll  AUD=        0.7546         0.7579      -0.44%     +4.59%
 ar                                                                 
 Euro/Swiss       EURCHF=     1.0858         1.0855      +0.03%     +1.32%
 Euro/Sterling    EURGBP=     0.8803         0.8813      -0.11%     +3.35%
 NZ               NZD=        0.7206         0.7239      -0.46%     +3.82%
 Dollar/Dollar                                                      
 Dollar/Norway    NOK=        8.5365         8.5436      -0.08%     -1.16%
 Euro/Norway      EURNOK=     9.5145         9.5090      +0.06%     +4.72%
 Dollar/Sweden    SEK=        8.7607         8.7810      -0.15%     -3.81%
 Euro/Sweden      EURSEK=     9.7637         9.7784      -0.15%     +1.92%
    

    
 (Reporting by Ritvik Carvalho in London; Editing by Meredith Mazzilli)
  
 
 

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