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TOKYO – The US dollar fell below a one-year high versus key peers on Tuesday as traders awaited key US payrolls data at the end of the week for clues on the timing of Federal Reserve stimulus and the start of interest rate hikes. .

The Australian dollar maintained a three-day gain, trading little changed from the day before, at $0.72905, when it touched a four-day high of $0.73045. The Reserve Bank of Australia meets on Tuesday, with economists predicting no change in the policy rate unanimously by Reuters.

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The New Zealand Dollar held close to the four-day high of $0.6981 in the previous session, changing hands at $0.6960 after three days of gains. When the country’s central bank sets policy on Wednesday, the market sees a quarter-point rate hike.

Dollar fall as soft inflation raises questions on timing

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The US dollar index, which measures the currency against six rivals, was nearly flat at 93.845, having eased slightly after reaching 94.504 on Thursday, its highest level since the end of September 2020.

This was followed by a rally of up to 2.8% since September 3, as traders pegged prices as soon as the following month and a potential rate hike next year, while keeping the currency safe amid concerns over global risk-taking. Haven demand also benefited. Deadlock for US debt limit deadlock.

“There is a lot of bad global news in the USD,” Mark McCormick, global head of FX strategy at TD Securities, wrote in a report. “The key to the markets in the coming weeks is to determine the extent of the risk premium in advance to see how these factors play out.”

“While the near-term USD bias is tilted higher, we are wary of pursuing moves at these levels,” McCormick said.

Friday’s nonfarm payrolls data is expected to show a continued recovery in the labor market, with a forecast of 488,000 jobs in September, according to a Reuters poll – enough to keep the Fed on course to begin tapering before the end of the year.

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Elsewhere, the Canadian dollar hit a near one-month high of C$1.2558 per greenback on Monday – down about 0.1% to C$1.2599 – from a three-year peak from crude oil’s rally.

Sterling held near a four-day high of $1.3640, changing hands last time at $1.3605.