March 6, 2019 / 4:32 PM / 2 months ago

FOREX-Canadian dollar falls on rate-hike uncertainty; greenback steady

    * Canadian dollar falls as BOC sees rate hikes more
uncertain
    * U.S. dollar holds near 2-week high before Fed's Beige Book
 
    * Euro pauses near $1.13 ahead of ECB meeting
    * Australian dollar falls to 2-month low on rate-cut bets
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 6 (Reuters) - The Canadian dollar sagged to
a two-month low on Wednesday as the Bank of Canada expressed
caution about the timing of future rate increases, prompted by
expected economic softness in the first half of the year.
    Like the Australian dollar, the Canadian currency has been
under pressure on bets that their central banks might consider
easing interest rates to counter further slowing in their local
economies, analysts said.
    "The moves are about the dovishness of their central banks
and deterioration in their domestic data," said Ben Randol,
senior FX strategist at Bank of America Merrill Lynch in New
York.
    The BOC said earlier on Wednesday there was "increased
uncertainty" around future rate hikes as it held interest rates
steady as expected.
    The Canadian dollar fell to C$1.3457 after the release of
BOC's latest policy statement, which was its lowest against its
U.S. counterpart since Jan. 4. At 11:25 a.m. EST (1625 GMT), it
was 0.69 percent weaker at C$1.3443.
    The Aussie dollar was $0.7025, down  0.83 percent on the day
after hitting $0.7021, a two-month low. 
    The greenback was generally firmer against most major
currencies in advance of the Federal Reserve's release of its
Beige Book at 2 p.m. EST (1900 GMT), which is a snapshot of
regional U.S. economic conditions.    
    While the Federal Reserve took a dovish turn of its own in
late January, the dollar has been supported by the relative wide
differentials between U.S. bond yields and most developed
economies, analysts said.
    For example, benchmark 10-year Treasury yields were about
256 basis points higher than those on 10-year German Bunds
.
    Speculators have remained bullish on the greenback with
ongoing uncertainties about Brexit and trade negotiations
between China and the United States.
    Meanwhile, currency market volatility has slumped in 2019 as
a pause in central bank tightening and hopes for a resolution in
the U.S.-China trade conflict suppress price movements. Deutsche
Bank's Currency Volatility Index is approaching record lows.
 
    Viraj Patel, global macro strategist at investment advisory
firm Arkera, said realized volatility in euro/dollar was at or
near record lows with traders struggling to find direction. 
========================================================
    Currency bid prices at 11:26AM (1626 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1318        $1.1306     +0.11%         -1.31%      +1.1326     +1.1288
 Dollar/Yen       JPY=        111.6900       111.8900    -0.18%         +1.30%      +111.9200   +111.6700
 Euro/Yen         EURJPY=     126.42         126.51      -0.07%         +0.16%      +126.5400   +126.2000
 Dollar/Swiss     CHF=        1.0036         1.0040      -0.04%         +2.27%      +1.0056     +1.0032
 Sterling/Dollar  GBP=        1.3136         1.3175      -0.30%         +2.97%      +1.3178     +1.3125
 Dollar/Canadian  CAD=        1.3441         1.3345      +0.72%         -1.45%      +1.3456     +1.3349
 Australian/Doll  AUD=        0.7025         0.7082      -0.80%         -0.34%      +0.7092     +0.7022
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1360         1.1357      +0.03%         +0.94%      +1.1369     +1.1348
 Euro/Sterling    EURGBP=     0.8614         0.8580      +0.40%         -4.12%      +0.8619     +0.8578
 NZ               NZD=        0.6774         0.6789      -0.22%         +0.85%      +0.6801     +0.6754
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.6650         8.6608      +0.05%         +0.30%      +8.6957     +8.6557
 Euro/Norway      EURNOK=     9.8062         9.7981      +0.08%         -1.01%      +9.8275     +9.7927
 Dollar/Sweden    SEK=        9.2906         9.3078      -0.10%         +3.65%      +9.3379     +9.2803
 Euro/Sweden      EURSEK=     10.5160        10.5261     -0.10%         +2.46%      +10.5537    +10.4950
    

    
 (Additional reporting by Tommy Wilkes in LONDON
Editing by Emelia Sithole-Matarise, Mark Potter and Jonathan
Oatis)
  
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