The dollar paused for breath on Wednesday after surging with bets on higher rates when Jerome Powell was picked for a second term as Federal Reserve chair, while the New Zealand dollar was on edge ahead of a central bank decision on a rate-hike path.
In emerging markets, the Turkish lira has collapsed and fell more than 11% in one session overnight, setting the scene for further capital outflows and possibly putting pressure on EM currencies globally.Register now for FREE unlimited access to reuters.comThe kiwi has been slipping ahead of the Reserve Bank of New Zealand meeting, which is the main focus of traders in the Asia session, even though a hike is expected and pricing suggests a 40% chance it is a big one -- 50 basis points.
"Conversely, a hawkish statement and higher forward guidance should limit the damage if RBNZ opts for the majority expectation of 25 bp." Elsewhere, moves were slight and the dollar clung to hefty gains made as aggressive shifts in rates markets and interest rate expectations flowed into currency trade.
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