NEW YORK/LONDON: The US dollar traded in a narrow range on Tuesday as markets awaited news from central bankers in coming days that might spark volatility. The US dollar index was unchanged at 93.8330 at 1356 GMT. It was hovering midway between a one-year high of 94.563 hit earlier in the month and a one-month low of 93.483 made on Monday.
Analysts said it might stay there through a slew of central bank meetings and economic data that could shift views on interest rates, inflation and growth rates. Yields on 10-year US and German government securities also stayed in narrow ranges, with the US note yielding 1.6361% in the morning in New York.
"The markets are just pausing right now," said Joseph Trevisani, senior analyst at FXStreet.com. The Bank of Canada meets on Wednesday and the European Central Bank and Bank of Japan meet on Thursday. Next week brings meetings of the US Federal Reserve, Bank of England, Reserve Bank of Australia and Norges Bank.
The euro was unchanged at $1.1610. The euro has been weakened recently by expectations that the European Central Bank will take a dovish stance when it meets. Bigger movements came from the British pound, the Australian dollar and the Japanese yen.
Sterling rose to more than $1.38 after British retailers reported stronger than expected sales in October affirming the prospect of higher rates. The pound then slipped back and was at $1.3794, still up 0.2% for the day.
The Aussie, which tends to move with commodity prices, gained 0.3% to $0.7514. Last week, it traded above $0.75 for the first time since July.
The US dollar rose 0.4% against the Japanese yen, with the pair at 114.1600, below the four-year high of 114.695 reached last week.
The Bank of Japan is expected to maintain its massive stimulus programme and slash this year's inflation forecast when it meets on Thursday, showing that it has no intention to follow other central banks in backing away from pandemic policies.
The Canadian dollar gained slightly on the greenback on Tuesday as oil prices rose, but it was held back by the approaching Bank of Canada meeting. The Bank of Canada is expected to raise its inflation forecast and to largely end stimulus from its pandemic-era bond-buying program. So far in 2021, energy-exporting currencies whose central banks are preparing to tighten - such as the Canadian dollar or Norwegian crown - have outperformed, ING strategists noted.
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