FOREX-Dollar nears 100 yen; Swedish and Norwegian crowns slide

Tue Nov 12, 2013 7:55am EST

Related Topics

* Dollar/yen nears 100 yen on Fed tapering expectations
    * Swedish crown tumbles on weak CPI data, rate cut worries
    * Norwegian crown hits near 4-year low versus euro
    * Sterling hits 2-month low vs dollar on UK inflation data

    By Jessica Mortimer
    LONDON, Nov 12 (Reuters) - The dollar hit a one-month peak
against the yen on Tuesday on the chances of the Federal Reserve
trimming stimulus sooner than previously thought, while the
Swedish and Norwegian crowns tumbled on expectations of lower
interest rates.
    The dollar rose 0.6 percent to 99.80 yen, its
strongest since Sept. 13, lifted by higher U.S. bond yields in
the wake of strong U.S. jobs data on Friday.
    "Better-than-expected U.S. payrolls last week and also the
outlook for easier monetary policy in Europe is helping the
dollar," said Niels Christensen, currency strategist at Nordea.
    The dollar faced resistance at 100 yen and at the September
peak of 100.62 yen.
    Scandinavian currencies were among the biggest fallers, with
the Swedish crown losing 1.3 percent against the
euro to hit a 17-month low around 8.92 crowns per euro after
weak Swedish inflation data prompted talk of a rate cut.
 
    "The CPI print from Sweden was the nail in the coffin for
getting a rate cut. Given that the market is not fully priced
for a cut there is some more room for the Swedish crown to
fall," said Carl Hammer, chief currency strategist at SEB in
Stockholm. 
    He said SEB had changed their forecasts after the data and
now expected an easing of official borrowing costs in December,
adding that the Swedish crown could fall to 9 or 9.10 crowns per
euro.
    The Norwegian crown also hit its lowest in nearly four years
against the euro on expectations the Norwegian
Central Bank would follow the European Central Bank and cut
rates next year. 
    Analysts said Brazilian's mining giant Vale's 
$1.66 billion sale of shares in Norsk Hydro added to
selling pressure on the Norwegian currency. 
    
    POUND FALLS
    Sterling slid 0.8 percent on the day to a two-month low
against the dollar of $1.5854 after UK inflation for
October fell more than expected.  
    However, the pound may get a lift from the central bank's
quarterly inflation report on Wednesday. Many in the market
expect the BoE will bring forward the point at which it sees UK
unemployment hitting 7 percent, the level at which it has said
it would consider raising rates. 
    The dollar index rose 0.35 percent to 81.374, edging
back towards a two-month peak of 81.482 struck on Friday.
    Speculation has grown that the Fed will start to reduce its
$85 billion-a-month bond-buying programme sooner rather than
later after the U.S. jobs numbers. The programme has flooded the
world with cheap dollars and expectations it will scale it back
earlier tend to boost the dollar.
    The euro was down 0.2 percent at $1.3386 but held
above a two-month low of $1.3295 hit on Thursday when it sold
off sharply after the ECB's unexpected interest rate cut.
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