Dollar Slips, Yuan Steadies after CB Moves to Limit Gains

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The dollar hovered near fivemonth lows on Tuesday as investors waited for euro zone inflation data and a U.S. manufacturing survey, while the yuan steadied after Chinas central bank took steps to limit its appreciation.

The dollar index was back below 90 in early European trading, having hit as high as 90.447 on Friday, when a measure of U.S. inflation closely watched by the Fed posted its biggest annual rise since 1992. The gauge sank 0.3 on Monday in a market thinned by U.S. and British holidays.

Fed officials, led by Chair Jerome Powell, have said repeatedly they expect price pressures to be transitory and monetary stimulus to stay in place for some time, but investors are wary that a strong pandemic recovery could force the Feds hand.

Australias central bank left its cash rate at record lows and reiterated its lowerforlonger policy stance, even as data showed the countrys output was above its prepandemic level.

But the Australian dollar was still up around 0.5 versus the U.S. dollar at 0739 GMT, at 0.77625.

The New Zealand dollar was up 0.1 at 0.72845. The Reserve Bank of New Zealand surprised markets last week by hinting at a future interest rate hike.

Chinas yuan was steady after authorities ordered banks to increase their foreign exchange holdings, a move seen as an attempt to limit the fast yuan appreciation.

The offshore yuan was at 6.3726, flat on the day, having crossed the key psychological 6.40 level last week and touched a new threeyear high of 6.3524…

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