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Dollar Waits on Inflation Data, Aussie Gets China Lift

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LONDON Reuters The dollar barely budged against the euro, yen and pound on Tuesday ahead of U.S. inflation data, while the Australian dollar and Chinese yuan ticked higher after reassuring export numbers from Beijing.

The possibility of U.S. stimulus withdrawal brought to the fore by a surprise shift in tone last month from the Federal Reserve has boosted the dollar in recent weeks despite a renewed rise in coronavirus cases in many parts of the world.

With U.S. consumer price inflation later likely to feed the debate, the greenback was virtually unchanged versus the euro at 1.1856 after its more than 2 rise versus the common currency over the last month.

Economists polled by Reuters expect the U.S. CPI to have risen 0.5 from May and 4.9 from a year earlier. Dealers reckon a miss on either side could move the dollar and the bond market by shifting expectations on interest rates.

Analysts at JPMorgan said central banks around the world are becoming increasingly more hawkish at the moment with a few notable exceptions the European Central Bank, the Bank of Japan and Peoples Bank of China, which made an dovish adjustment on Friday.

Monetary policy divergence remains a tradable theme both in G10 and EM, JPMorgans analysts said. In the portfolio, we stay long USD vs euro, yen, Swiss franc; overweight Czech crown vs Romanian leu and overweight Brazilian real, Mexican peso vs Colombian and Chilean pesos.

Top European Central Bank policymakers, including both its…

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