FOREX-Dollar trades in tight range ahead of Yellen speech

Thu Aug 21, 2014 10:47am EDT

Related Topics

* Traders shrug off bullish U.S. data

* Yellen to speak on jobs Friday

* Norwegian crown hits two-month high (Adds New York open, updates prices; changes byline, dateline, previous LONDON)

By Michael Connor

NEW YORK, Aug 21 (Reuters) - The dollar held onto healthy recent gains to trade little changed on Thursday as central bankers gathered for a three-day meeting in Wyoming that will feature a potentially market-rattling speech by Federal Reserve Chair Janet Yellen.

The dollar has climbed steadily this week against other major currencies, riding rising U.S. Treasury yields in contrast to declining euro rates.

The U.S. dollar index of six currency combinations touched a fresh 11-month peak of 82.364 in overnight trading but was down 0.06 percent in early New York trading.

The dollar was little changed against the Japanese yen at 103.73 yen, while the euro recovered from an 11-month low against the dollar after better-than-expected German private sector growth data. The euro, which traded in early May a hair under $1.40, was last up 0.20 percent to $1.3283.

Currency trading was also dulled by worries ahead of a flurry of financial indicators on Thursday, according to Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

U.S. data showing fewer than forecast Americans filing new claims for unemployment benefits had little effect on the dollar, as did a stronger-than-anticipated rise in America's leading economic indicators for July.

"Stronger short-term gains for the buck are seen hinging on remarks Friday from Fed Chair Janet Yellen on the job market," Manimbo said. "Words that strike a more dovish than hawkish tone would leave the dollar vulnerable to a pullback."

Amongst the biggest movers in the European session was the Norwegian crown which hit a two-month high against the euro after forecast-busting growth data.

Norway's economy grew 1.2 percent in the second quarter, double expectations, and piling pressure on the central bank to bring forward a rate hike.

The crown also rose sharply against the dollar despite the greenback being the most sought-after of the actively traded currencies in the past few sessions. The dollar last traded at 6.154 crowns, off 0.6 percent.

In the euro zone, Germany's private sector grew for a 16th month running in August, suggesting Europe's largest economy could expand robustly in the third quarter after it surprisingly contracted in the second.

Data from France, however, showed business activity was stagnant in August, although service sector growth picked up. (Editing by James Dalgleish)

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