* FX volatility at lowest since February 2020
* With inflation data out, traders look to FOMC meeting
* Bitcoin holds steady
* Graphic: World FX rates tmsnrt.rs/2RBWI5E
(Updates prices, adds commentary)
By Sinead Carew
NEW YORK, June 10 (Reuters) - The dollar index was down
slightly on Thursday after alternating between losses and gains
earlier in the session as investors digested elevated U.S.
inflation and European Central Bank commentary while eyeing the
U.S. Federal Reserve's next meeting.
After adopting a wait-and-see attitude all week, sucking
volatility from the market and leaving major currencies mostly
range-bound, Thursday's developments appeared to add little new
direction to currency markets.
Earlier in the day, the ECB raised its growth and inflation
views but promised to keep ample stimulus flowing, fearing that
a retreat now would accelerate a worrisome rise in borrowing
costs and choke off recovery.
Then in the United States, data showed that the number of
Americans filing new claims for unemployment benefits fell last
week to the lowest level in nearly 15 months, while consumer
prices increased further in May as the pandemic's easing grip on
the economy continued to boost domestic demand.
While emerging market currencies such as the Turkish lira
showed more pronounced reactions, dollar traders were already
cautiously looking ahead to the U.S. Federal Open market
Committee (FOMC) policy meeting scheduled for next week.
"The dollar's on the sidelines as it looks for the next key
event risk and that's the FOMC meeting and the prospects the Fed
might begin the talk of tapering, which could provide support to
the dollar," said Paresh Upadhyaya, director of fixed income and
currency strategy at Amundi U.S.
Investors were closely watching U.S. consumer prices for any
signs that higher prices could last longer than expected,
potentially challenging the Fed's insistence that inflation
pressures are transitory and that monetary stimulus should stay
in place for some time yet.
While Upadhyaya sees Thursday's data supporting the U.S.
central bank's stance, he said "a lot of people fearing they
could get chopped up in the price action might just want to
wait" before making big bets.
The dollar index, which measures the greenback
against a basket of major currencies, has fluctuated narrowly
around the psychologically important 90 level, and was last down
0.08% at 90.0670 The euro was last down 0.05% at
$1.2172.
"You have this tug between the two currencies, and it's
creating a back and forth. That's why you're seeing a little bit
of a cap in terms of dollar weakness and euro strength," said
Minh Trang, senior FX trader at Silicon Valley Bank.
"The overall trend has been a bit of dollar weakness, not
just because of the robust growth in the U.S. There's been
robust growth overall. A lot of economies have been recovering,"
he said. "When you have optimism in overall global growth,
typically that creates a risk on mentality that's going to favor
other currencies over the dollar."
Deutsche Bank's Currency Volatility Index, was at
its lowest level since February 2020.
In crypto markets, bitcoin edged higher, last up
0.4% at $36,563. The best-known crypto currency has struggled
since reaching a record $64,895.22 in mid-April.
========================================================
Currency bid prices at 3:10PM (1910 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 90.0670 90.1400 -0.08% 0.096% +90.3210 +89.9810
Euro/Dollar $1.2172 $1.2179 -0.05% -0.38% +$1.2194 +$1.2144
Dollar/Yen 109.4100 109.6300 -0.19% +5.90% +109.7900 +109.4150
Euro/Yen 133.18 133.53 -0.26% +4.93% +133.7500 +133.1200
Dollar/Swiss 0.8948 0.8960 -0.12% +1.15% +0.8991 +0.8942
Sterling/Dollar $1.4170 $1.4114 +0.39% +3.71% +$1.4173 +$1.4074
Dollar/Canadian 1.2090 1.2110 -0.15% -5.05% +1.2124 +1.2070
Aussie/Dollar $0.7755 $0.7731 +0.30% +0.80% +$0.7763 +$0.7719
Euro/Swiss 1.0892 1.0909 -0.16% +0.79% +1.0925 +1.0892
Euro/Sterling 0.8590 0.8625 -0.41% -3.88% +0.8642 +0.8590
NZ $0.7199 $0.7178 +0.30% +0.25% +$0.7212 +$0.7165
Dollar/Dollar
Dollar/Norway 8.2710 8.2775 -0.09% -3.69% +8.3450 +8.2700
Euro/Norway 10.0707 10.0807 -0.10% -3.79% +10.1542 +10.0620
Dollar/Sweden 8.2479 8.2611 -0.21% +0.63% +8.2873 +8.2442
Euro/Sweden 10.0406 10.0614 -0.21% -0.36% +10.0801 +10.0408
(Additional reporting by Ritvik Carvalho in London, Kevin
Buckland in Tokyo; Editing by Elaine Hardcastle, Gareth Jones,
Raissa Kasolowsky and Jonathan Oatis)
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