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3 Minutes to Read by 3 Minutes to Read by 3 Minutes to Read by 3 SINGAPORE/LONDON (Reuters) – Investors awaited signals about when the US Federal Reserve could start withdrawing stimulus as pressure for rate hikes receded due to conflicting labor market data. Antipodean currencies surged on Tuesday, taking advantage of the greenback’s weakness. A banker counts US dollars at a bank in Westminster, Colorado, in this file photo. Wednesday, November 3, 2009. Rick Wilking/REUTERS/File Photo The New Zealand currency soared after a remarkably positive assessment of business conditions spurred investors to predict a rate hike as soon as November. The kiwi was up 0.77 percent at $0.7080 at 0756 GMT, having reached its highest level since mid-June. The Australian dollar jumped as high as 1.2 percent to $0.7599 after the Reserve Bank of Australia reduced bond purchases and revised its rate outlook to leave a sliver of room for rises before 2024. The RBA joins a tiny but rising group of central banks that are backing away from significant pandemic-era support. The Australian dollar, on the other hand, slowed and was up about 0.7 percent in European morning trading. The changes extended the dollar’s decline since mixed U.S. labor market data last week relieved some of the pressure on the Federal Reserve to raise rates, as traders expect other central banks to follow suit. The dollar and other major currencies were relatively unchanged as investors awaited the minutes from the Federal Reserve’s meeting in June, when the central bank startled markets by shifting to a more hawkish stance. They’re scheduled to be released on Wednesday. The dollar index was down 0.05 percent at 92.08 at 0809 GMT. A U.S. services poll and a German attitude survey will be released later in the day, when U.S. markets return from their holiday break. The euro was unchanged at $1.1865, with the European Central Bank continuing trailing many of its peers in terms of tightening. In a morning letter to her clients, Commerzbank strategist You-Na Park-Heger wrote, “As inflation pressure in the euro zone remains fairly low, the ECB is likely to take its time with the reduction in asset purchases.” “Anyway, a first rate hike is a long way off,” she added. Policymakers at the European Central Bank are discussing a new strategy, with many now favoring allowing inflation to rise above 2% for a time after it has remained below that level for the past decade. Annual price increase is expected to be 2.6 percent in the fourth quarter of this year, up from 1.9 percent last month, according to ECB predictions. After that, it’s expected to drop to 1.5 percent in 2022 and 1.4 percent in 2023. The pound surged 0.3 percent to $1.3888, a one-week high, as investors anticipated England being the first major country to publicly begin living with the coronavirus by removing COVID-related restrictions in a fortnight. Kim Coghill and Jacqueline Wong edited the piece./nRead More

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