Fed officials reiterate view for transient inflation spike * Euro above key $1.2250 level as region’s recovery quickens * Yuan pushes to fresh three-year high beyond 6.40 boundary * NZ dollar jumps as central bank hints at 2022 rate hike By Kevin Buckland TOKYO, May 26 (Reuters) – The dollar wallowed near a five-month trough against major peers on Wednesday as Federal Reserve insistence that stimulus will continue kept yields low, while surprisingly hawkish New Zealand central bank comments pushed the kiwi higher. The euro traded just north of the key $1.2250 level — holding gains from Tuesday when it pushed as high as $1.2266 for the first time since Jan. 8 — as Europe’s pandemic recovery gathers pace.
The dollar index, which gauges the greenback against six rivals, languished at 89.617 in Asia, after pushing as low as 89.533 on Tuesday. The Chinese yuan strengthened past 6.4 per dollar in onshore trading for the first time since June 2018, while its offshore counterpart pushed to a fresh three-year high at 6.3858. New Zealand’s currency jumped after the central bank hinted at a potential interest rate hike by September next year in its monetary policy statement. The kiwi last traded 1.1% higher at $0.73072. “There are now several central banks that appear to be closer to a tightening cycle than the Federal Reserve, and markets are sensing that,” said Imre Speizer, Westpac’s head of New Zealand strategy.
