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REFILE-FOREX-Dollar edges up as markets wait for U.S. inflation data

Published 13/04/2021, 05:53 pm
© Reuters.
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(Refiles to correct time zone for CPI data, removes reference to ZEW survey)

* Dollar index edges up

* Euro, Aussie and Kiwi dollars slip

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

LONDON, April 13 (Reuters) - The dollar edged higher on Tuesday, helped by a pick-up in U.S. Treasury yields, but was still near three-week lows as markets waited for inflation data in the United States.

The dollar has fallen so far in April, after surging in the first three months of 2021 on expectations that a combination of monetary stimulus and government spending would cause inflation to spike.

U.S. CPI data for March is due at 1230 GMT and is expected to show a rise in inflation to 2.4%.

Market participants will also be paying attention to how yields react to a 30-year Treasury auction. strategists wrote in a note to clients that higher inflation would support higher U.S. yields, which could in turn cause the dollar to outperform lower-yielding currencies such as the yen, Swiss franc and euro.

The inflation data "should further fuel the narrative that the U.S. economy is starting to overheat and are to likely add to concerns that the Fed's firmly dovish message will be increasingly challenged," ING said.

At 0725 GMT, the dollar was up 0.1% against a basket of currencies, at 92.201 =USD , moving away from recent three-week lows.

The 10-year U.S. Treasury yield was at 1.6979% US10YT=RR for its third consecutive day of gains, but still well below the 1.7760% level hit on March 30, which was the highest in over a year.

"There's a widespread expectation that inflation is set to rise in the coming months, but also a consensus for the most part that this will be a transitory phenomenon," Deutsche Bank (DE:DBKGn) strategist Jim Reid wrote in a note.

Overnight data showed China's exports rose in March, with import growth rising to four-year highs, signalling an improvement in global demand. stock markets were broadly positive after the data, but the boost did little to support currency markets. By early London trading, China's offshore yuan was down 0.1% against the dollar, changing hands at 6.5523 CNH=EBS .

The euro was down 0.1%, at $1.1895.

The Australian dollar, which is seen as a liquid proxy for risk appetite, was down 0.2% versus the U.S. dollar at 0.7609 AUD=D3 .

On Monday, Australia abandoned its goal to vaccinate nearly all its population by the end of 2021. New Zealand dollar also fell, down 0.1% NZD=D3 . The Reserve Bank of New Zealand is due to meet on Wednesday and is expected to keep rates constant. British pound was up 0.1% against the dollar at $1.3763. The UK economy grew in February as companies prepared for the lifting of the third coronavirus lockdown, gross domestic product data showed. bitcoin was up 1.6% at $60,807.77, ahead of Coinbase Global Inc COIN.O , the largest U.S. cryptocurrency exchange, listing on the Nasdaq on Wednesday. World FX rates

https://tmsnrt.rs/2RBWI5E

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