* Dollar stays near one-week lows vs currency basket
* Fed minutes indicate bond-buying will end in October
* Swedish crown at 1-week high after inflation data
By Anirban Nag
LONDON, July 10 The dollar was stuck near
one-week lows against a basket of major currencies on Thursday,
staying on the back foot after minutes of the Federal Reserve's
June meeting gave no clear indication about the timing of an
interest rate rise.
In the European session, the Swedish crown rose to a
one-week high against the euro after data showed consumer prices
in Sweden rose more than expected. That drove some investors to
trim short bets against the currency made after a sharp interest
rate cut by the country's central bank last week.
The focus though was on the dollar. The Fed minutes
confirmed the U.S. central bank's monthly bond purchases would
probably end in October and showed that policymakers debated the
complexities of unwinding a stimulus program that has flooded
the financial system with over $2 trillion.
The uncertain outlook for the timing of the Fed's move has
kept a lid on Treasury yields, with the two-year yield also
hovering near one-week lows at around 0.48 percent.
The dollar index, which has a good correlation with U.S.
yields, was flat at 80.03 having hit a one-week low of 79.976
early in the Asian session.
"Anyone expecting anything hawkish from the Fed minutes
would be disappointed," Jeremy Stretch head of currency strategy
at CIBC World Markets, said. "Unless Treasury yields start
moving up, to reflect the better data from the U.S., it would be
a rather frustrating time for dollar bulls."
Against the yen, the dollar slipped about 0.15 percent to
101.50 yen, not far from a one-week low of 101.445 yen
hit on Wednesday.
The euro was steady on the day at $1.3635 after
rising to a one-week high of $1.3649 when the Fed minutes were
Swedish consumer prices rose 0.2 percent in June from the
previous month and were up 0.2 percent from the same month last
year, easing some of the concerns about deflationary pressures
in the economy.
The euro fell to 9.2200 crowns from around
9.2690 crowns before the inflation data was released, and down
0.4 percent on the day. The crown had hit a 3-1/2 year low
against the euro last week after the Riksbank surprised
investors by cutting the repo rate by 50 basis points.
"We would recommend investors to fade into the Swedish
crown's rally as the central bank is unlikely to tolerate any
additional tightening that can come through the currency's
rise," Geoff Yu, currency strategist at UBS, said.
The Australian dollar, meanwhile, fell after a rise in the
country's jobless rate raised concern about its stalled economy
and stoked expectations that interest rates may remain on hold
for months to come.
The Aussie shed 0.4 percent to $0.9374 after
figures showed unemployment rose to 6.0 percent last month as
more people went looking for work.
Putting further pressure on the Australian currency, trade
data from China, the country's largest trading partner, showed
exports grew less than expected in June.
(Editing by Jane Merriman)