October 11, 2018 / 4:15 PM / 2 months ago

FOREX-Dollar slips on stock losses, lower bond yields

    * U.S. 10-year Treasury yield retreats to one-week low
    * U.S. September consumer price data weaker than expected 
    * Euro gains as minutes signal ECB on track to pare stimulus
    * Swedish crown jumps on upbeat inflation, home price data 
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates market action to midday)
    By Richard Leong
    NEW YORK, Oct 11 (Reuters) - The dollar fell to a near
two-week low on Thursday against a basket of currencies as
traders pared greenback holdings on lower U.S. Treasury yields
and further losses on Wall Street.
    A weaker-than-forecast rise in U.S. consumer prices in
September also reduced bets for a faster pace of interest rate
increases by the Federal Reserve, further eroding the dollar's
appeal.
    The euro climbed to a one-week peak against the dollar as
minutes of the European Central Bank's policy meeting last month
suggested policy-makers have not abandoned their plan to end the
ECB's 2.6 trillion-euro bond-purchase program this year.
    The Swedish crown jumped following stronger-than-expected
inflation and home price data, raising prospects for the
Riksbank to increase interest rates in December, analysts said.
    The Chinese yuan rose in offshore trading, rebounding from
early weakness due to a global equity rout. Traders brushed off
comments from U.S. President Donald Trump signaling he is not
backing off on escalating his trade war with Beijing.

    "Yields have pulled back and you have softer inflation data.
This puts a question on the number of Fed rate hikes in 2019,"
said Minh Trang, senior FX trader at Silicon Valley Bank in
Santa Clara, California.
    The U.S. Labor Department said on Thursday its consumer
price index rose 0.1 percent in September, less than the 0.2
percent increase forecast among analysts polled by Reuters.

    The CPI miss reduced bets U.S. inflation is accelerating,
spurring appetite for U.S. government bonds. This added to the
safe-haven bid for Treasuries stemming from a dramatic sell-off
in overseas stock markets that followed big losses in the S&P
500 and Dow Jones indexes on Wednesday.

    An index that tracks the dollar versus six currencies
fell to 94.987, the lowest since Sept. 28. At 10:50 a.m. (1450 
GMT), the dollar index was down 0.28 percent at 95.242.
    The benchmark 10-year U.S. Treasury note yield
fell to a one-week low at 3.1649 percent. It reached a
seven-year peak at 3.261 percent on Tuesday.
    Forecasts from Fed officials released last month showed they
expected three rate hikes in 2019, and some have said they are
open to a rate increase in December, which would be the fourth
this year.
    Their counterparts at the ECB seemed on track, based on the
latest minutes, to normalize their ultra-loose policy this year
despite concerns about slowing growth in Europe.
    The euro zone common currency was up 0.41 percent
at $1.15655 after touching a one-week high. It was 0.42 percent
higher at 129.840 yen.
    The Swedish crown was 1.35 percent higher at 9.0075 per
dollar and 0.92 percent stronger at 10.4279 per euro
.
    Offshore yuan rose 0.42 percent to 6.8944 per
dollar, rebounding from an eight-week low set earlier on
Thursday. 
========================================================
    Currency bid prices at 12:00PM (1600 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1563        $1.1518     +0.39%         -3.61%      +1.1599     +1.1520
 Dollar/Yen       JPY=        112.2400       112.2700    -0.03%         -0.38%      +112.5300   +111.9800
 Euro/Yen         EURJPY=     129.81         129.32      +0.38%         -3.97%      +130.2000   +129.2200
 Dollar/Swiss     CHF=        0.9920         0.9899      +0.21%         +1.82%      +0.9922     +0.9857
 Sterling/Dollar  GBP=        1.3190         1.3194      -0.03%         -2.38%      +1.3246     +1.3184
 Dollar/Canadian  CAD=        1.3037         1.3066      -0.22%         +3.66%      +1.3071     +1.3025
 Australian/Doll  AUD=        0.7111         0.7060      +0.72%         -8.85%      +0.7129     +0.7047
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1470         1.1404      +0.58%         -1.87%      +1.1473     +1.1393
 Euro/Sterling    EURGBP=     0.8765         0.8730      +0.40%         -1.33%      +0.8767     +0.8729
 NZ Dollar/Dolar  NZD=        0.6514         0.6447      +1.04%         -8.07%      +0.6524     +0.6447
 Dollar/Norway    NOK=        8.2243         8.2348      -0.13%         +0.21%      +8.2421     +8.1908
 Euro/Norway      EURNOK=     9.5112         9.4876      +0.25%         -3.43%      +9.5191     +9.4764
 Dollar/Sweden    SEK=        9.0140         9.1422      -0.94%         +9.90%      +9.1422     +8.9663
 Euro/Sweden      EURSEK=     10.4259        10.5249     -0.94%         +5.96%      +10.5359    +10.3750
    

    
 (Additional reporting by Saikat Chatterjee in London
Editing by Dan Grebler and James Dalgleish)
  
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