* Dollar posts slight gains on AUD, NZD in Asia
* Euro and yen steady as dollar bears regroup
* Bitcoin on track for weekly drop
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Jan 22 (Reuters) - The dollar steadied in a
cautious Asia session on Friday but it is set to log its worst
week of the year as investors welcomed the Joe Biden
administration by seeking out riskier assets.
Against the Japanese yen JPY=EBS , the dollar has fallen
0.3% this week and it has shed 0.8% against the euro EUR=EBS ,
the largest weekly percentage drops since mid-December.
The dollar last traded steady at $1.2172 per euro and bought
103.54 yen. It advanced a little against the Australian and New
Zealand dollars but not enough to derail weekly gains for the
Antipodeans, of 0.6% for the Aussie and 0.9% for the kiwi.
AUD/
Biden, whose Democratic Party controls the U.S. Congress, is
seeking to borrow and spend to support the economy. The
anticipation of stimulus has driven equities to record highs,
while inflation expectations have held real yields in check.
Central banks from Tokyo to Frankfurt, Ottawa and Oslo have
also this week left policy settings untouched and begun to
cautiously talk up recovery prospects, while the U.S. Federal
Reserve looks committed to low rates for a very long time.
"The underlying driver of Aussie, kiwi and Canadian dollar
strength is that their central banks will not be able to keep
policy rates at current levels in a global recovery," said
Societe Generale strategy chief Kit Juckes.
"They'll all tighten long before the Fed."
The Canadian dollar CAD=D3 slipped 0.2% to 1.2671 per
dollar with a dip in oil prices on Friday, but it is 0.5% higher
this week and hit an almost three-year high on Thursday after
the Bank of Canada surprised some traders by not trimming rates.
Sterling GBP=D3 eased 0.2% from Thursday's 2-1/2 year peak
to sit at $1.3707. It is supported by the hope that coronavirus
vaccinations can underpin an economic recovery later in the
year. GBP/
Bitcoin BTC=BTSP is travelling toward its worst week since
September as regulatory risk and profit-taking deepen its
pullback from record levels. RESUMED?
The dollar's losses this week might call time on the bounce
that has carried the dollar index =USD about 1% above the
three-year trough it touched in the first trading week of 2021,
and settle the greenback into a downward trend once more.
The index was flat on Friday at 90.110 and 0.7% lower for
the week. Forecasts for dollar weakness are widely held, and
crowds are betting against the greenback, with the value of
dollar shorts hitting an almost ten-year high last week.
"We expect the multi-month move lower in the dollar to
continue in coming months," Nomura analysts said in a note,
citing U.S. trade and budget deficits and their expectation for
gains in the euro and Chinese yuan.
"We believe that, as the U.S. economy recovers in a
risk-positive environment, the balance of payments could become
less supportive of the dollar," they added, especially if Biden
lifts taxes and global investment flows head elsewhere in
response.
Data published in Asia on Friday showed Japanese inflation
slumping and Australia's consumer spending stalling.
However stronger-than-expected inflation in New Zealand sent
the yield on 10-year kiwi government bonds NZ10YT=RR to a
nine-month high, prompting Kiwibank to follow Westpac and drop
its forecast for additional rate cuts.
"Rampant advances in the housing market have surely taken a
negative cash rate off the table," Kiwibank's chief economist,
Jarrod Kerr, said in a note to clients.
The currency NZD=D3 fell 0.4% against the dollar with the
broader mood on Friday, but inched higher against the Aussie
AUDNZD= . The kiwi has rallied 30% on the dollar since last
March's decade low.
Preliminary purchasing managers' index figures are due later
on Friday across Europe and the United States, and weakness is
expected as fresh waves of coronavirus infection have driven new
lockdowns and curtailed growth.
========================================================
Currency bid prices at 1:41PM in Singapore (0541 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2172 $1.2169 +0.03% -0.37% +1.2178 +1.2162
Dollar/Yen JPY=D3 103.5650 103.5100 +0.05% +0.26% +103.6100 +103.5100
Euro/Yen EURJPY= 126.05 125.91 +0.11% -0.69% +126.1000 +125.9000
Dollar/Swiss CHF=EBS 0.8850 0.8851 -0.01% +0.03% +0.8856 +0.8846
Sterling/Dollar GBP=D3 1.3712 1.3736 -0.16% +0.38% +1.3735 +1.3705
Dollar/Canadian CAD=D3 1.2672 1.2638 +0.27% -0.49% +1.2673 +1.2635
Aussie/Dollar AUD=D3 0.7745 0.7765 -0.25% +0.68% +0.7769 +0.7741
NZ NZD=D3 0.7193 0.7220 -0.35% +0.20% +0.7224 +0.7191
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX +0.7191
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World FX rates https://tmsnrt.rs/2RBWI5E
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