July 9, 2019 / 2:59 PM / 10 days ago

RPT-FOREX-Dollar touches 3-week high before Powell, FOMC minutes

 (Repeats to additional subscribers)
    * Speculative bullish dollar bets hit lowest in a year -
CFTC data
    * Euro dips to 3-week lows on view of a dovish ECB under
Lagarde 
    * Pound hits 6-month low on Brexit jitters, bets on BOE rate
cut 
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

    By Richard Leong
    NEW YORK, July 9 (Reuters) - The dollar edged up to a
three-week high against a basket of currencies on Tuesday as
traders await clues in Federal Reserve Chairman Jerome Powell's
testimony before Congress and minutes from the Fed's last policy
meeting on possible rate cuts.
    The greenback has strengthened versus most major currencies
in the aftermath of a government report last Friday that showed
surprisingly strong domestic hiring in June.  
    The 224,000 job gain last month scaled back bets the U.S.
central bank would embark on a deep 50-basis point rate decrease
at the end of the month, although traders are still positioned
for a more modest 25 basis-point decrease.
    Amid U.S. President Donald Trump's browbeating, Fed
policy-makers may eventually relent and lower borrowing costs
due to modest wage growth and sluggish domestic inflation. 
    "Yes, it reduces the need for an immediate interest-rate
cut, but it doesn’t eliminate it," said Kathy Lien and Boris
Schlossberg, managing directors of FX strategy at BK Asset
Management wrote in a research note.
    Interest rates futures implied traders now only see a 7.0%
chance of a 50-basis point rate cut at the end of July, down
from 25% a week earlier, according to CME Group's FedWatch
program.
    Ahead of Friday's jobs report, speculators shrank their
bullish bets on the dollar to their lowest level since July
2018, based on U.S. Commodity Futures Trading Commission data
released late on Monday.  
    At 10:35 a.m. (1435 GMT), the index that tracks the
greenback against six other major currencies was up 0.12%
at 97.505 after touching 97.588, which was the highest since
June 19.
    Further gains for the dollar hinge on any clues on possible
rate cuts in Powell's two-part testimony before Congress that
begins on Wednesday, and in the minutes of the Federal Open
Market Committee's previous meeting last month.
    "This week’s FOMC minutes should remind us of the extent of
the central bank’s dovishness. Their concerns centre around
trade and inflation," BK's Lien and Schlossberg said.
    Against the dollar, the euro dipped -0.09% to $1.1204 after
hitting $1.1194, which was the lowest in early three weeks.
    The greenback edged up 0.11% to 108.850 yen.
    The nomination of IMF Chairwoman Christine Lagarde as the
new head of the European Central Bank has stoked traders'
worries that the ECB would be inclined to ease monetary policy
faster than its U.S. counterpart.    
    Elsewhere, the British pound dropped to a new six-month low
of $1.2457, with Brexit jitters and growing
expectations of a BoE rate cut adding to sterling's weakness.
Excluding January's "flash crash", the currency is close to lows
last seen in April 2017.    
========================================================
    Currency bid prices at 10:39AM (1439 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1204        $1.1214     -0.09%         -2.31%      +1.1219     +1.1195
 Dollar/Yen       JPY=        108.8400       108.7100    +0.12%         -1.29%      +108.9600   +108.6900
 Euro/Yen         EURJPY=     121.94         121.91      +0.02%         -3.39%      +122.1200   +121.8600
 Dollar/Swiss     CHF=        0.9933         0.9938      -0.05%         +1.21%      +0.9951     +0.9924
 Sterling/Dollar  GBP=        1.2462         1.2510      -0.38%         -2.31%      +1.2523     +1.2441
 Dollar/Canadian  CAD=        1.3126         1.3092      +0.26%         -3.75%      +1.3134     +1.3088
 Australian/Doll  AUD=        0.6922         0.6970      -0.69%         -1.79%      +0.6975     +0.6923
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1128         1.1143      -0.13%         -1.12%      +1.1158     +1.1123
 Euro/Sterling    EURGBP=     0.8987         0.8961      +0.29%         +0.03%      +0.9002     +0.8957
 NZ               NZD=        0.6601         0.6620      -0.29%         -1.73%      +0.6631     +0.6603
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.6508         8.6423      +0.10%         +0.14%      +8.6757     +8.6345
 Euro/Norway      EURNOK=     9.6911         9.6916      -0.01%         -2.17%      +9.7170     +9.6818
 Dollar/Sweden    SEK=        9.4781         9.4596      +0.11%         +5.74%      +9.4986     +9.4559
 Euro/Sweden      EURSEK=     10.6212        10.6100     +0.11%         +3.48%      +10.6383    +10.6020
 

    
 (Additional reporting by Olga Cotaga in LONDON
Editing by Kirsten Donovan and Nick Zieminski)
  
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