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Dollar drifting as traders turn to central bankers

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By Tom Westbrook

SINGAPORE (Reuters) – The dollar hovered near recent lows on Tuesday as traders braced for a slew of central bank meetings from Australia to Europe and Canada this week, looking for any signs that they are making progress towards policy normalisation.

The possibility of a tapering delay in the United States, after weaker-than-expeced jobs data on Friday, has put extra focus on policymakers elsewhere and put pressure on the dollar.

First up is Australia, where an announcement is due at 0430 GMT. The Australian dollar has paused a recent rally as markets wait to see whether lockdowns in Sydney and Melbourne have derailed plans to taper bond purchases.

The Aussie last bought $0.7447.

If the central bank pauses its tapering plans, traders are likely to sell the currency, possibly pushing the Aussie towards its support level around $0.7420, according to IG Markets analyst Kyle Rodda. A hawkish central bank would send the currency higher, he…

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