FOREX-U.S. dollar rises vs most currencies as Fed taper talk gathers pace

US Dollar Report

By Gertrude Chavez-Dreyfuss

    * Slew of U.S. data this week ahead of next week's Fed meeting
    * Euro/dollar hits two-week low
    * Walmart says news on litecoin was fake

 (Adds comments, Litecoin, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Sept 13 (Reuters) - The dollar climbed to a two-week peak against a basket of currencies on
Monday, bolstered by expectations the U.S. Federal Reserve could reduce its asset purchases by the end of
the year despite a surge in COVID-19 cases.
    The greenback, however, came off its highs in afternoon trading. 
    The dollar indexearlier rose to 92.887, its highest since Aug. 27. It was last up slightly at
92.664. 
    A round of U.S. economic data is due out this week, starting with consumer prices on Tuesday, which will
give the latest update on how hot inflation has been ahead of next week's Fed meeting.
    Philadelphia Fed President Patrick Harker became the latest official to say he wants the central bank to
start tapering this year, saying in a Nikkei interview that he was keen to scale back asset purchases.
    Tapering talk has boosted the dollar, said Erik Nelson, macro strategist at Wells Fargo Securities in
New York.
    "We noticed from the Fed communication that they would like to de-link the taper from the rate hike,"
Nelson said. "But it will take a lot of convincing and frankly a lot of time for the market to change its
reaction function. For now, a taper timeline is closely linked to a rate hike timeline in the market."
    Tapering typically lifts the dollar as it means a step toward tighter monetary policy. It also means the
Fed will be buying fewer  debt assets, which suggests there will be fewer dollars in circulation.
    The Wall Street Journal reported on Friday that Fed officials will seek an agreement to begin paring
bond purchases in November.
    Aside from inflation, U.S. retail sales and production figures are also scheduled for release this week.
    "Another high CPI (consumer price index) reading this week in the face of weakening economic data could
begin to paint the Fed into a corner as pressure mounts for stimulus normalization," said Christopher
Vecchio, senior analyst at DailyFX.com, the research unit of forex broker IG.
    The euro was among the currencies to lose ground to the dollar, dipping to $1.1770, its lowest in a
little over two weeks, after the European Central Bank said last week it would start to trim its own
emergency bond purchases. The euro was last down 0.1% at $1.1801.
    Against the yen, the dollar was up 0.1% at 110 yen. The dollar also gained 0.5% versus the
Swiss franc to 0.9228.
    In the cryptocurrency market, bitcoin was down 2.8% at $44,762.
    Litecoin, with a market cap of nearly $12 billion and one of the earliest digital currencies in
circulation, fell 2.6% to $180.78, according to crypto data tracker CoinGecko, after Walmart Inc
said a press release regarding the retailer's partnership with the cryptocurrency was fake.
    Litecoin rose as much as 27.4% on the fake news.
    
    ========================================================
    Currency bid prices at 3:02PM (1902 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index                 92.6780        92.6300     +0.06%         2.997%        +92.8870    +92.5640
 Euro/Dollar                  $1.1803        $1.1812     -0.06%         -3.39%        +$1.1817    +$1.1771
 Dollar/Yen                   110.0000       109.9150    +0.09%         +6.48%        +110.1550   +109.8600
 Euro/Yen                     129.83         129.79      +0.03%         +2.29%        +129.9400   +129.5900
 Dollar/Swiss                 0.9228         0.9181      +0.52%         +4.31%        +0.9241     +0.9182
 Sterling/Dollar              $1.3827        $1.3831     -0.03%         +1.21%        +$1.3851    +$1.3797
 Dollar/Canadian              1.2670         1.2695      -0.22%         -0.53%        +1.2695     +1.2639
 Aussie/Dollar                $0.7356        $0.7354     +0.07%         -4.34%        +$0.7375    +$0.7337
 Euro/Swiss                   1.0891         1.0839      +0.48%         +0.78%        +1.0893     +1.0839
 Euro/Sterling                0.8534         0.8538      -0.05%         -4.51%        +0.8540     +0.8511
 NZ                           $0.7101        $0.7127     -0.32%         -1.08%        +$0.7122    +$0.7098
 Dollar/Dollar                                                                                    
 Dollar/Norway                8.6495         8.6685      -0.24%         +0.71%        +8.6975     +8.6300
 Euro/Norway                  10.2123        10.2290     -0.16%         -2.43%        +10.2455    +10.1720
 Dollar/Sweden                8.6115         8.6310      -0.22%         +5.06%        +8.6591     +8.6016
 Euro/Sweden                  10.1662        10.1890     -0.22%         +0.89%        +10.2024    +10.1627
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Iain Withers and Saikat Chatterjee in
London; Editing by Angus MacSwan, Will Dunham and Dan Grebler)
  

Our Standards: The Thomson Reuters Trust Principles.

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