The dollar dipped Tuesday in Asia after the International Monetary Fund made a big gold sale to India, but the U.S. currency rebounded as Australia's central bank signaled it may pause its monetary tightening next month.
The moves were mostly modest in thin trade as Japanese markets were closed for a national holiday.
The euro and gold gained at the dollar's expense as news that the IMF sold 200 metric tons of gold to the Reserve Bank of India stoked expectations that central banks, especially in Asia, will continue to shift away from their reliance on the U.S. currency.
But the buck got a lift against the Australian dollar, as well as the euro, when the Reserve Bank of Australia--after raising rates by a quarter percentage point for a second month in a row, as expected--said the tightening "will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead."
The euro was at $1.4781 at 0430 GMT, according to EBS via CQG, after rising above $1.4800 on the IMF gold sale. It was quoted at $1.4768 in late North American trading. The euro was at Y133.37 from Y133.44. The dollar was at Y90.24, up from Y90.07. The Australian dollar was at US$0.9011, down from US$0.9090 before the RBA decision.
The IMF's gold sale was at an expected average price of $1,045 an ounce, far higher than the $850 price the institution had projected only a few months ago. It rekindles expectations that central banks will keep diversifying their reserves away from the U.S. currency.
Although this adds to general unease about the dollar's global status, the gold sale itself isn't expected to have major market implications.
"Diversification has been an ongoing story for Asian central banks," said Westpac senior commodity analyst Justin Smirk. "Gold holdings in comparison to dollar holdings are low. But it's not possible for them to change rapidly out of the dollar. This story is one of evolution, not revolution."
Conversely, the dollar likely won't get much lasting benefit from the job-well-done tone of RBA Gov. Glenn Stevens's comments because market participants don't think the central bank is finished raising rates.
There is some chance of a pause in December, but it is all about watching the economic data, said Annette Beacher at TD Securities.
"It does seem to suggest now that they moved in October and November, there is some possibility of a pause," she said. "However, should we get another string of decent labor market data, house prices, inflation--that still leaves December fairly on the agenda."
The moves were mostly modest in thin trade as Japanese markets were closed for a national holiday.
The euro and gold gained at the dollar's expense as news that the IMF sold 200 metric tons of gold to the Reserve Bank of India stoked expectations that central banks, especially in Asia, will continue to shift away from their reliance on the U.S. currency.
But the buck got a lift against the Australian dollar, as well as the euro, when the Reserve Bank of Australia--after raising rates by a quarter percentage point for a second month in a row, as expected--said the tightening "will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead."
The euro was at $1.4781 at 0430 GMT, according to EBS via CQG, after rising above $1.4800 on the IMF gold sale. It was quoted at $1.4768 in late North American trading. The euro was at Y133.37 from Y133.44. The dollar was at Y90.24, up from Y90.07. The Australian dollar was at US$0.9011, down from US$0.9090 before the RBA decision.
The IMF's gold sale was at an expected average price of $1,045 an ounce, far higher than the $850 price the institution had projected only a few months ago. It rekindles expectations that central banks will keep diversifying their reserves away from the U.S. currency.
Although this adds to general unease about the dollar's global status, the gold sale itself isn't expected to have major market implications.
"Diversification has been an ongoing story for Asian central banks," said Westpac senior commodity analyst Justin Smirk. "Gold holdings in comparison to dollar holdings are low. But it's not possible for them to change rapidly out of the dollar. This story is one of evolution, not revolution."
Conversely, the dollar likely won't get much lasting benefit from the job-well-done tone of RBA Gov. Glenn Stevens's comments because market participants don't think the central bank is finished raising rates.
There is some chance of a pause in December, but it is all about watching the economic data, said Annette Beacher at TD Securities.
"It does seem to suggest now that they moved in October and November, there is some possibility of a pause," she said. "However, should we get another string of decent labor market data, house prices, inflation--that still leaves December fairly on the agenda."
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