Dollar stabilizes, euro near 4-week low after ECB’s announcement

The dollar paused its climb on Friday, while the euro wallowed near its four-week low against the greenback after the European Central Bank signaled further monetary easing by the end of the year.

Overnight, the euro’s decline in addition to U.S. data helped lift the greenback to a near four-week high against a basket of currencies.

The ECB kept interest rates steady on Thursday but committed to contain the growing fallout from a second wave of coronavirus infections, saying it would hone its response by its December meeting, as widely expected by the market.

“We agreed, all of us, that it was necessary to take action and therefore to recalibrate our instruments at our next Governing Council meeting,” ECB President Christine Lagarde told a news conference.

Daisuke Karakama, chief market economist at Mizuho Bank, said that a build-up of expectations for ECB’s monetary easing may cause risks such as a dollar-buying spree or the euro to fall further.

“It’d be fine if the ECB can exceed market expectation… but now that they’ve made an announcement in advance, there’s a risk if (the December meeting) turns out to be underwhelming,” Karakama said.

The euro slightly firmed to $1.1679 in Asia, after hitting a four-week low of $1.1650 in U.S. trade overnight.

Against the yen, the common currency slightly eased to 121.79 yen.

Data on Thursday showed the U.S. economy grew at a record pace for the third quarter and an improving trend in jobless claims, while scars from the coronavirus recession still lingered.

U.S. gross domestic product rebounded at a 33.1% annualized rate last quarter, according to an advance estimate on Thursday, the fastest pace since the government started keeping records in 1947.

Separately, a report showed 751,000 people in the United States filed for state unemployment benefits in the week ended Oct. 24, compared with 791,000 the previous period.

The dollar index was flat at 93.889 but sat within reach of Thursday’s four-week high at 93.916, poised to mark the biggest weekly gains since the end of September.

Still, uncertainty surrounding Tuesday’s U.S. presidential election and coronavirus fears continue to loom over market.

“As dollars were bought mostly against the euro for the past two days, there’s a move to sell the greenback back ahead of the election,” said Makoto Noji, chief FX strategist at SMBC Nikko.

Global daily coronavirus cases rose by over 500,000 for the first time, with France and Germany going back into coronavirus lockdowns next week.

In the United States, a single-day record was set on Thursday with over 91,000 new coronavirus cases, as hospitalizations hit new highs in many states, according to a Reuters tally.

Data due later on Friday include euro zone’s third-quarter gross domestic product and October inflation, while the U.S. awaits September personal consumption and expenditures as well as the Chicago PMI.

The Chinese yuan firmed against the greenback as China’s leaders endorsed a new five-year plan to drive sustained economic growth, which markets believe will require a stronger currency.

The greenback edged lower against the Japanese yen at 104.30 yen, after rallying overnight from a five-week trough as it benefited from a rebound in U.S. treasury yields and broad dollar buying.

Sterling changed hands at $1.2906, undermined by a lack of Brexit-related headlines as London and the European Union have just two months to reach a post-Brexit trade agreement.

Among antipodean currencies, the Aussie last sat at $0.7032, a fraction above a three-month low of $0.7002 marked overnight.

Meanwhile, the kiwi held steady, last fetching 0.6619 per dollar.

Dollar holds ground as rising Covid-19 cases boost safe-haven demand

The dollar held gains against a basket of major currencies on Thursday as escalating coronavirus cases in Europe stoked investor fears that fresh lockdowns would further hit the already fragile economic recovery.

The safe-haven greenback steadied against a basket of six currencies at 93.39, taking a pause after its 0.3% gains in early trade.

Concerns of further damage to the economy grew as France and Germany went back into lockdown on Wednesday, as a massive second wave of coronavirus cases threatened to overwhelm Europe.

“The vibe is similar to what it was like in late February to early March,” said Rikiya Takebe, senior strategist at Okasan Online Securities, referring to the time when the coronavirus started to spread in the U.S. and Europe.

“Back then, there was a shift to dollar-buying to prevent risks in case of emergency, leading to a higher dollar. I think the current move on the market is somewhat the same,” he said.

The euro changed hands at $1.1753 after sliding to a one-week low of $1.1718 overnight. It moderately rose against the Japanese yen, last fetching 122.79 yen after hitting its weakest levels since July overnight.

Amid surging cases across Europe, the European Central Bank at its meeting is expected to resist pressure on Thursday to unveil new stimulus measures, but will likely pave the way for action in December.

“EUR can fall further if ECB President Christine Lagarde lays the ground work for further policy easing at her post meeting press conference,” said Commonwealth Bank of Australia currency analyst Kim Mundy in a note.

Traders also braced for volatility with the U.S. election less than a week away, while the country, like Europe, also faces an increase in coronavirus infections.

With former Vice President Joe Biden consistently leading in the polls over President Donald Trump, traders are cautiously betting on his victory and a possible “blue wave” outcome, where Democrats control both chambers of Congress.

“While Biden is taking the lead, Trump has been catching up in some parts of swing states,” said Shinichiro Kadota, senior strategist at Barclays.

“There is certainly a possibility of a higher volatility in the market if it becomes a closer battle, involving risks such as full results not being released (on the election day),” he said.

The onshore yuan rose modestly to 6.7104, still away from a 27-month high hit last week.

Offshore, the yuan traded at 6.7095 per dollar, with one-week yuan implied volatility hitting a more than five-year high as the U.S. elections neared.

Data due on Thursday includes U.S. third-quarter gross domestic product, which analysts expect to show record growth but not enough to make up for the pandemic impact.

The greenback firmed against the Japanese yen at 104.45 yen, having dropped to a more than one-month low on Wednesday.

The Bank of Japan on Thursday kept its monetary policy steady, while signaling that it has delivered enough stimulus for now. In the quarterly report, the BOJ trimmed its growth forecast but kept an upbeat outlook for a moderate recovery.

BOJ Governor Haruhiko Kuroda will hold a news conference later in the day to explain the decision.

The Aussie drifted away from its near one-week low of $0.7038 marked overnight. It last sat at $0.7064, supported by a more than 1% gain in U.S. stock futures.

Across the Tasman Sea, the kiwi edged higher against its U.S. counterpart, last up 0.18% to 0.6649.

Dollar dips after previous gains amid COVID-19, election uncertainty

The U.S. dollar slipped on Tuesday as investors took some profits after the previous session’s gains that also saw a sell-off in equities, while worries about a second coronavirus wave and uncertainty ahead of the U.S. election persisted.

The greenback fell against the currencies that benefit mostly from higher risk appetite such as the euro, sterling, and commodity-linked currencies rose.

Monday saw the steepest stock market sell-off in a month and a bond rally, but foreign exchange market activity has remained relatively muted, with price moves on Tuesday limited. “The uncertainty in the economic outlook has not changed one bit,” said Edward Moya, senior market analyst, at OANDA in New York, but noted that some positive stories on the U.S. earnings front.

“Markets are becoming more convinced a blue wave is happening,” Moya said, referring to a victory of the Democratic Party in the Senate, House of Representatives, and the White House in next Tuesday’s election.

“The prospects of a Biden administration is probably more positive for the fight against COVID,” he added. Polls give Democrat Joe Biden a solid lead but the contest is much tighter in battleground states that could decide the outcome.

That said, analysts warned investors were clearly cautious after the United States, Russia and France all hit new daily records for COVID-19 infections. They said prices were not moving much because of a reluctance to build positions before the U.S. presidential election on Nov. 3.

After initially falling, the euro was up 0.2% at $1.1826 in late morning trading.

The dollar index, which measures the greenback against a basket of major currencies, weakened 0.2% to 92.92.

The greenback fell 0.3% versus the yen to 104.53 yen, and was little changed against 0.9074.

“Many sources of uncertainty are still preventing clearer trends from emerging,” UniCredit analysts said in a research note. “The impasse on both U.S. budget talks and Brexit negotiations, as well as the implications of rising COVID-19 infections on 4Q20 GDP growth, play in favor of more euro-dollar and sterling-dollar stabilization for now,” they said, pointing to levels of “just above $1.18 and $1.30, respectively.”

The usually risk-sensitive Australian and New Zealand dollars gained.

The yuan weakened after Reuters reported that China’s central bank had neutralised the counter-cyclical factor in its daily yuan midpoint fixing in a move to let the fixing more closely reflect actual market moves.
The move is typically positive for the dollar, said Stephen Innes, chief market strategist, at online brokerage Axi.

“Such a move means dollar/yuan should generally fix higher. The removal of the element would imply greater FX flexibility,” he added. The dollar was last flat 0.1% at 6.7039 yuan.

Dollar rises vs risky currencies as coronavirus surges, US stimulus hope fades

The dollar gained on Monday, as surging coronavirus cases in Europe and the United States and a lack of progress on a U.S. stimulus package made traders cautious.

U.S. House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday to the latest stimulus plan, but there is little evidence a deal is close.

The United States has recorded its highest number of new COVID-19 cases for two consecutive days. So has France. Spain announced a new state of emergency and Italy has ordered restaurants and bars to shut by 6 p.m.

Media reports that the Oxford/AstraZeneca vaccine has proved successful in elderly people and that staff at a major British hospital were told to prepare for a vaccine as early as next month failed to bolster sentiment.

Stephen Innes, chief global market strategist at broker Axi, said hopes for a vaccine prevented markets crashing on Monday.

“Fortunately, there are several vaccines in the pipeline, or we could have been looking at a pretty significant market reset this morning with Covid-19 flash points flaring up in virtually every corner of the globe this weekend,” he said.

An index tracking the U.S. dollar against a basket of currencies was last up 0.2% at 92.95. Euro/dollar – the most traded currency pair and part of the index – fell 0.3% at 1.1831.

The dollar also rose 0.1% against the Japanese yen at 104.87 .

The biggest losers among major currencies were the Norwegian crown and the Australian dollar, which last week enjoyed hefty returns as traders took on more risk.

The Aussie dollar was last down 0.3% at 0.7118. The Nokkie was falling 0.9% at 9.3015 against the dollar and by 0.7% at 11.0050 versus the euro, having hit earlier a three-week low of 11.0190.

Norway is also due to announce stricter measures this week to limit the spread of the coronavirus following increases in the number of cases.

Traders will be watching for the German Ifo business survey at 0800 GMT. Current conditions are expected to have improved, according to economists polled by Reuters.

Elsewhere, the British pound lost ground in early trading, falling 0.3% to $1.2995 but was stable versus the euro at 91 pence.

The Chinese yuan was down 0.4% against the U.S. dollar at 6.6907 in the offshore market as the Chinese government began discussions on its next five-year plan.

Dollar firm after debate, but dragged toward weekly loss by stimulus bets

The dollar inched higher at the end of a tough week on Friday, having shed almost a cent against the euro and suffered its largest weekly drop against the yen in a month, as a measured U.S. presidential debate left investors in a cautious mood.

President Donald Trump adopted a more restrained tone than in the first debate, though exchanges again focused around the handling of the Covid-19 pandemic and personal slights.

The dollar ground about 0.1% higher against a basket of currencies in the Asia session, just clear of Wednesday’s seven-week low, but still leaving it down about 0.7% for the week and in the bottom half of a months-long range.

“The market reaction is rather muted in Asian trading hours but has slightly tilted towards a more conservative sentiment as seen in the strengthened dollar index,” said Gary Ng, Asia-Pacific economist at Natixis in Hong Kong.

The safe-haven yen also rose about 0.2% to 104.70 per dollar, paring some losses made on Thursday after U.S. House Speaker Nancy Pelosi said there was progress in stimulus talks.

The yen is up about 0.7% for the week, its sharpest weekly rise since mid September, as investors who expect turbulent trade around the Nov. 3 election head for some shelter.

The euro slipped 0.1% to $1.1800 and the Australian dollar also handed back a small early-morning gain during the Trump-Biden debate. Both currencies remain more than half a percent ahead on the dollar over the week.

“People are just closing out longs ahead of the election just in case Biden isn’t (elected),” said Chris Weston, head of research at broker Pepperstone in Melbourne.

“We’re coming into that eye of the storm now where it takes a bit of a brave soul to put on new positions ahead of the election.”

Bond market bets on stimulus

Persistent hopes that Congress might pass a stimulus package before the election and confidence that spending follows anyway, no matter who gets elected, has driven a selloff in the bond market in anticipation of inflation and government borrowing.

The dollar has been sold because the prospect of stimulus has supported investors’ mood. A Biden victory, which polls predict, is seen as more likely to drive further dollar weakness as he is expected to spend more on coronavirus aid than Trump.

However betting markets showed a small movement in Trump’s favor in the immediate aftermath of the debate, bookmaker Ladbrokes said on Twitter on Friday – which helped the dollar to firm.

Elsewhere the New Zealand dollar edged down 0.1% after softer-than-expected inflation data, though it has still gained almost 1% for the week.

British and European Purchasing Managers’ Index figures are due later on Friday and could move markets if they show that a recent resurgence in coronavirus cases and the reimposition of some curbs on movement are starting to hurt economically.

Sterling slipped on Thursday on uncertainty over Brexit outlook, but it is up 1.2% this week and is clinging on above $1.30 thanks to hopes that Britain and the European Union can eventually reach some sort of trade deal.

The Chinese yuan also held its ground on the greenback after an official at China’s foreign exchange regulator said it has been more stable than expected, suggesting authorities are not too worried about its recent rise.

The yuan has gained about 7.5% since the end of May as China has led the global coronavirus recovery. It last sat at 6.6828 per dollar in onshore trade, about half a percent shy of a 27-month peak it hit on Wednesday.

“The 6.6300 levels in the USD/CNH reached on Wednesday may be a near-term bottom,” said OCBC Bank strategist Terence Wu.

“Nevertheless, this bounce should not impinge on the RMB trend. This may be an opportunity to re-enter USD/CNH shorts at 6.6800/7000 levels.”

Dollar rises from 7-week lows on U.S. stimulus unease, COVID-19 cases

The dollar edged up from seven-week lows on Thursday as hopes for a fiscal package in the United States before the November elections crumbled again and the global surge in COVID-19 cases fuelled demand for safe-haven assets like the greenback.

Progress towards a U.S. stimulus deal has boosted sentiment in world markets and lifted demand for riskier assets in recent sessions — weighing this week on the dollar, which tends to weaken when risk appetite picks up.

But pressure on the currency eased after U.S. President Donald Trump on Wednesday accused Democrats of being unwilling to craft an acceptable compromise.

News that Europe has seen the number of coronavirus cases surge to a record high, with Spain becoming the first Western European country to exceed 1 million infections, added to the cautious tone in world markets.

This backdrop appeared to favour the dollar, which had fallen for the last three days against a basket of other major currencies.

“There are a host of risk events that you could argue threatens risk assets and those threats should support the dollar,” said MUFG’s head of research, Derek Halpenny.

“Yesterday’s moves were so significant, and with no new news to follow through on, there is a modest recovery in the dollar.”

The dollar index was last trading at 92.863, a touch firmer on the day and above the 92.469 low hit on Wednesday that marked the lowest level since Sept. 2.

The euro was a quarter of a percent lower at $1.18325, down from Wednesday’s one-month highs of $1.18805.

And the dollar was firmer against Japan’s currency at 104.73 yen, above a one-month low hit during the previous session at 104.345.

The tone in currency markets was generally subdued as investors waited for new impetus. A final debate between President Trump and Democratic rival Joe Biden takes place later in the day.

“The U.S. Presidential elections are only 12 days away, before that nobody wants to commit too much to a particular direction in euro/dollar,” said Commerzbank FX analyst Esther Reichelt.

Having hit six-week highs on Wednesday amid Brexit optimism, sterling too pulled back against the U.S. currency. The British pound was last down 0.4% at $1.3093.

The Australian dollar was 0.3% softer versus the greenback, while the New Zealand dollar was a touch firmer at $0.6658 — up from the $0.6551 low touched on Tuesday.

Elsewhere, the Chinese yuan retreated from a 27-month high on signs that the authorities have become increasingly wary over the recent rapid gains in the currency.

The offshore Chinese yuan was last down 0.4%at 6.6724 per dollar.

Dollar softens ahead of U.S. election with stimulus in focus

The U.S. dollar dipped on Tuesday, hitting a one-month low against a basket of major currencies, as investors awaited the outcome of fiscal stimulus talks ahead of the upcoming U.S. presidential election and coronavirus cases spiked in Europe.

The dollar index declined for a second day, with the safe-haven currency hitting 92.991, its lowest since Sept. 21, as House Speaker Nancy Pelosi she was optimistic Democrats could reach a deal with the Trump administration on additional COVID-19 relief that could get aid out by early next month.

The euro, last up 0.49%, hit a one-month high of $1.184 versus the greenback, after having weakened 0.1% to $1.17600 in early London trading.

“You have to think about U.S. dollar weakness as a possible longer-lasting fixture,” said Yousef Abbasi, global market strategist at StoneX.

While fiscal stimulus talks have been at an impasse, investors are looking beyond the Nov. 3 elections, he said.

“The most optimistic stimulus story is the ‘blue wave’ stimulus story: Biden gets the White House, the Senate turns Democrat, and boom, we unlock $4 trillion to $5 trillion in spending in 2021, related to stimulus, some of the Biden initiatives on infrastructure, green energy and things like that,” he said.

While markets are confident a win by Biden would lead to more fiscal stimulus, investors are also wary of a potentially contested election result that might boost the greenback’s safe-haven appeal.

“As we approach U.S. elections and with COVID infections around the globe rising at a fast pace, investors may refrain from engaging into large trading positions,” said Charalambos Pissouros, a senior market analyst at JFD Group.

France reported a massive jump in people hospitalized and Ireland announced some of Europe’s toughest restrictions.

Still, markets have stayed within recent ranges with foreign exchange volumes dropping amid rising uncertainty in both the United States and Europe.

“Currency markets are in wait-and-watch mode with traders unwilling to take big bets before such a major event risk,” said Lee Hardman, currency strategist at MUFG in London.

Sterling dipped 0.07% to 1.2941.

Britain’s chief Brexit negotiator David Frost said there was no basis to resume trade talks with the European Union unless there was a fundamental change in Brussels’ approach.

The pound’s resilience to negative news flows pointed to optimism that a deal will eventually go through, said Stephen Innes, chief global market strategist at Axi.

“Let’s hope constructive progress endures. It feels like we are playing a pinball machine, getting bounced around but not going anywhere these days,” he said.

On the data front, U.S. single-family homebuilding surged to a more than 13-year high in September amid record-low mortgage rates and a migration to the suburbs and low-density areas in search of more room for home offices and schooling.

“These data suggest construction is blazing a trail as the economy normalizes amid the COVID-19 crisis,” ANZ Research said in a note to clients.

Elsewhere, the safe-haven yen edged up 0.05% against the dollar to 105.4650.

Dollar set for biggest weekly gain in a month as stimulus talks falter

The dollar paused on Friday but remained on track for its biggest weekly gain in a month amid growing market caution over a global surge in coronavirus cases and fading prospects of a U.S. stimulus package before the Nov. 3 election.

Fresh curbs to combat COVID-19 have been introduced across Europe while the U.S. Midwest is also battling record spikes in new cases as data shows the country’s economic recovery is losing steam.

Investors will get a further indicator of the health of the U.S. economy with retail sales data due later on Friday. Relief plans remain bogged down in a three-way negotiation between the White House, Senate Republicans and House Democrats.

The dollar and Japanese yen are both on track for weekly gains on investor appetite for safe haven assets, of 0.7% and 0.4% respectively.

The greenback hugged a tight range in morning trading in Europe on Friday, with the dollar index last down 0.1%. The euro strengthened slightly, last up 0.1%.

On a monthly basis, the dollar index is up 0.7%, its biggest rise since end-September.

“The fight against corona is not a sprint but a marathon and that is becoming increasingly clear on the FX market too,” said Esther Reichelt, FX analyst at Commerzbank, in a note.

“The winners will be all those economies and their respective currencies that do best at overcoming the economic challenges posed by the pandemic…Until then, the FX market will be dominated by risk considerations.”

Sterling gained around a third of a percent as markets waited for British Prime Minister Boris Johnson to set out his response to the European Union’s demand for more concessions in Brexit talks.

He had previously set Oct. 15 as a deadline for a deal to be reached. Britain’s Foreign Secretary Dominic Raab said on Friday there was still a trade deal “to be done”.

Dollars bought as stimulus hopes ebb; Aussie sinks on easing hints

The dollar inched higher on Thursday as rising coronavirus cases and scant progress towards a U.S. stimulus deal unsettled investors, while the Aussie dropped to a one-week low after the central bank chief hinted of a possible rate cut or bond buying.

France has imposed curfews as autumn brings a steep rise in infections, and the fear is that a new wave of lockdowns could stall the global recovery just as hopes for U.S. stimulus before the Nov. 3 election are fading.

The safe-haven yen stayed just shy of a two-week peak on the dollar. The greenback held or gained ground elsewhere, except against sterling which had jumped on signs of progress in Brexit talks.

The Australian dollar lost half a percent to $0.7129 after Reserve Bank of Australia Governor Philip Lowe mentioned bond buying and a small rate cut as among options for policy support during the next stages of recovery.

Lowe said Australia’s 10-year yield was among the highest in the developed world and the central bank was studying what benefits could come from buying longer-dated debt. He said it was possible to move rates from a record low 0.25% to 0.1%.

“These are pretty explicit policy options,” said Westpac FX analyst Sean Callow. “There was enough vibe in there for the market to lean towards (thinking) that they will do something.”

Slightly better-than-expected Australian employment data did little to shift those expectations.

Money markets are priced for a November rate cut and bond markets think the RBA could start buying further along the curve, with 10-year bond futures up 8.5 ticks to their highest since April.

Meanwhile, U.S. stimulus plans appear bogged down.

“Getting something done before the election and executing on that would be difficult,” U.S. Treasury Secretary Steve Mnuchin said on Wednesday, adding that he and Democrat House Speaker Nancy Pelosi are still “far apart” on their spending priorities.

Delay has supported the dollar for a few weeks, by weighing on investors’ sentiment and boosting demand for safer assets.

But a full blown rally has so far been staved off by the expectation that spending happens eventually. Against a basket of currencies the greenback was steady at 93.428.

“Do not rule out a more defensive tilt as we approach the U.S. elections, providing some support for the dollar,” OCBC Bank strategist Terence Wu said in a note on Thursday.

Sterling clung to a 0.5% overnight gain as the European Union and Britain were set to prolong Brexit talks past a mid-October deadline to try to bridge stubborn gaps holding up a new trade agreement, according to sources and documents.

European Union leaders meeting in Brussels on Thursday will pressure Britain for concessions, saying a trillion euros worth of trade could be sunk if London does not budge on fisheries, fair competition and solving disputes.

“The right noises seem to be heard from key officials,” said Chris Weston, head of research at broker Pepperstone.

“Given the rising concerns of COVID-19 into a cold and wet European winter, the last thing either side need, but more so the UK, is a move to WTO tariffs,” he said. “The prospect of a Free Trade Agreement (FTA), therefore, seems high.”

Dollar gains on hold as risks keep speculators at bay

The U.S. dollar held onto gains against most currencies on Wednesday as renewed questions about a coronavirus vaccine and lack of an agreement on additional U.S. fiscal stimulus prompted a shift to safer assets.

The yuan was little changed versus the dollar after the central bank’s daily fixing of the yuan’s mid-point was largely in line with estimates, suggesting authorities have paused their attempts to rein in the currency.

The euro and British pound are likely to extend declines, analysts said, as a return of restrictions on economic activity in Europe and Britain to battle a second wave of coronavirus infections unnerves investors.

Currency moves, however, are likely to be subdued as the U.S. presidential election looms on Nov. 3, but analysts said sentiment is leaning against riskier bets, which should support the dollar in the coming days.

“Many factors are pointing to more upside for the dollar,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“U.S. stimulus may not come until after the election. The People’s Bank of China is halting the yuan’s rise. There’s no reason to buy the euro, and there are a lot of euro longs that need to be unwound.”

The dollar last stood at $1.1743 per euro, holding onto a 0.6% gain from the previous session.

The pound traded at $1.2926, nursing a 1% loss from Tuesday.

Sterling also took a hit due to worries about little progress in trade talks between Britain and the European Union and the chance the Bank of England will adopt negative interest rates.

Risk appetite has weakened after Johnson & Johnson said on Tuesday it is pausing a clinical trial of a coronavirus vaccine and Eli Lilly and Co also said it paused a coronavirus antibody treatment.

Hopes are fading that U.S. Republicans and Democrats will reach a compromise on a new round of fiscal stimulus, which would deal a blow to the economic outlook.

Both developments are supporting the dollar, traders said.

The onshore yuan last traded at 6.7408 per dollar. On Monday the yuan posted its biggest daily fall in seven months after the central bank cut foreign exchange forward reserve requirements, which makes it cheaper to short the currency.

The Australian dollar was little changed in early Asian trade but is likely to add to its 1% decline on Tuesday due to concern about a row with Beijing over coal imports, traders said.

Across the Tasman Sea, the New Zealand dollar held steady against its U.S. counterpart.

Reserve Bank of New Zealand Assistant Governor Christian Hawkesby said on Wednesday that some economic data have surprised to the upside.

But he also said the central bank’s discussion of negative interest rates is “not a game of bluff”.