* Little impetus in major markets as summer lull sets in
* NZ dollar touches three-year highs, just off post-float
* Fed minutes and ECB's Draghi on menu for U.S. session
(Updates prices, adds more quotes)
By Patrick Graham
LONDON, July 9 The euro was steady against the
dollar on Wednesday, with traders looking to a speech by
European Central Bank chief Mario Draghi and minutes of the U.S.
Federal Reserve's latest meeting for direction later in the day.
Markets are still waiting for more strongly hawkish signals
from the Fed of higher interest rates next year that many expect
will eventually drive U.S. bond yields higher and the dollar
The euro drew some support from a relatively downbeat
assessment of the pace of U.S. growth from two Federal Reserve
officials overnight. But in a day bereft of top tier data there
was little for traders to get their teeth into.
"Its really been very quiet," said Daragh Maher, a
strategist with HSBC on Monday. "With the minutes today (Fed
chair) Janet Yellen was reasonably dismissive after the meeting
of any upside threat in inflation, so it will be interesting to
see if that mood is the same with others at the Fed."
Against a basket of major currencies, the greenback traded
marginally higher at 80.214. It was almost unchanged
against the euro at $1.3609.
Against the yen, the dollar has fallen all the way back to
levels seen before a strong jobs report last Thursday, hurt by a
retreat in U.S. Treasury yields from last week's highs. It held
steady at 101.69 yen on Wednesday.
"I think the contents of the minutes might turn out to be
dollar-positive," said Masafumi Yamamoto, market strategist for
Praevidentia Strategy in Tokyo.
"Whichever data you look at, the inflation rate (in the
United States) has been rising and I'm not sure that can be
dismissed as just noise."
The New Zealand dollar was trading just off a three-year
high of $0.8819 hit in early trade, steadying after a surge on
Tuesday triggered by improvement in the outlook on one of its
sovereign credit ratings.
The kiwi has gained around 9 percent since January on the
back of a steady rise in domestic interest rates; it is the only
developed world economy in which borrowing costs are rising.
"There's reasonable momentum in the kiwi," said HSBC's
Maher. "I quite like it against the Australian dollar - the
question there is does it have the strength to break through 105
(cents). It may do."
Analysts at French bank BNP Paribas made a similar
recommendation in a morning note, preferring the kiwi and
Canadian dollars over the Aussie.
"Commodity currencies are performing well despite the
backdrop of weaker equity markets," they said.
"The resilience in carry sentiment owes in part to the
perception that even as stronger U.S. data may push forward the
start of the Fed tightening campaign, the amount of overall rate
tightening for the cycle is likely to be more modest than
"We see CAD outperforming the AUD, particularly if the Bank
of Canada strikes a less dovish tone at next week's policy
(Additional reporting by Ian Chua and Masayuki Kitano; Editing
by Catherine Evans)