Chinese property stocks rally as banks pledge USD 38 billion in credit support

HONG KONG, Nov 24 (Reuters) – Chinese property shares jumped on Thursday after the country’s biggest commercial banks agreed to provide at least USD 38 billion in fresh credit lines to developers, adding to recent regulatory support measures to ease a stifling cash crunch in the sector.

Country Garden, China’s top developer by sales, rose more than 20% after state media reported on Thursday that it had received a credit line from Postal Savings Bank of China worth at least 50 billion yuan (USD 7.0 billion).

China Vanke, CIFI Holdings and Greentown China rose between 5.8% and 12.8% in Hong Kong.

A gauge tracking the sector, the Hang Seng Mainland Property Index, rose 6.4%.

Besides Postal Bank, three of China’s biggest state-owned banks have agreed to provide fundraising support to developers, including industry giants Vanke and Country Garden, in a coordinated effort to support the embattled property sector.

Policy priority has been placed on supporting the bigger and better developers, as it remains challenging for them to collect enough cash via sales, bond and equity financing, said Gary Ng, senior economist at Natixis Corporate and Investment Bank.

“But I am a bit worried about the smaller ones, and they might still be unable to repay debts due to the challenges in home sales or financing by themselves,” he said.

The impact on banks as a result of their increased lending to the embattled property developers will be mixed, analysts say, as they must to balance between heeding Beijing’s call to support the sector and warding off risks.

“Asset quality might be under challenge and the non-performing ratio for real estate will stay high for banks in the coming months,” Ng said.

Despite banks are making efforts to follow a regulatory call to bolster the sector, most of the new loans will go to state-backed developers, Shujin Chen, analyst with Jefferies, said in a note issued on Thursday.

“Private developers that already defaulted on public debts will still struggle,” she said.

Beijing has been stepping up measures in recent weeks to support the property sector, which has been hit by a debt crisis.

The sector has been reeling under mounting debts, defaults, slower sales and construction suspensions, after the authorities initiated a campaign to rein in excessive borrowing by developers.

Several developers have defaulted on their offshore debt obligations over the past year, fuelling a sector-wide downturn that has weighed on the world’s second-largest economy.

To ease the liquidity crunch, the central bank on Wednesday issued a notice outlining 16 steps to support the sector.

These include local financial firms allowing real estate companies to defer repayment of some loans, such as property development and trust loans, Reuters reported last week, citing sources with knowledge of the matter.

(Reporting by Xie Yu; Editing by Sumeet Chatterjee and Edmund Klamann)

China banks pledge USD 162 billion in credit to developers, shares rally

HONG KONG/BEIJING, Nov 24 (Reuters) – China’s biggest commercial banks have pledged at least USD 162 billion in fresh credit to property developers, bolstering recent regulatory measures to ease a stifling cash crunch in the sector and triggering a rally in property shares.

Three state-owned banks lined up around USD 131 billion worth of credit lines to developers on Thursday, a day after three other lenders committed USD 31 billion, responding to Beijing’s call for support.

The authorities have been stepping up measures in recent weeks to support developers, after many defaulted on their debt obligations and were forced to halt construction.

Economic prospects are also worsening due to renewed COVID-19 lockdowns and other curbs in cities nationwide. China reported record high COVID infections on Thursday.

The massive, coordinated injection of liquidity into the property sector buoyed the shares of major developers on Thursday.

Country Garden, China’s top developer by sales, closed more than 20% higher after state media reported on Thursday it had received a credit line from Postal Savings Bank of China (PSBC) worth at least 50 billion yuan (USD 7.00 billion).

China Vanke, CIFI Holdings, and Greentown China rose between 8.4% and 18.4% in Hong Kong.

A gauge tracking the sector, the Hang Seng Mainland Property Index .HSMPI, closed up 6.8%.

PSBC late on Thursday announced that it would provide a total of 280 billion yuan in financing to Country Garden as well as others.

Industrial and Commercial Bank of China (ICBC), the world’s largest bank by assets, also said on Thursday that it has agreed to offer 655 billion yuan of financing to 12 property firms including Vanke, Longfor and Country Garden.

China Construction Bank Corp 601939.SS signed cooperative agreements with eight property developers, including Vanke, Longfor and Midea, financial media outlet Yicai reported. No comment from the bank was immediately available.

China’s banking regulator also said on Thursday that banks issued 2.64 trillion yuan in real estate loans and 4.84 trillion yuan in mortgage loans from January to October.

WARDING OFF RISKS

“But I am a bit worried about the smaller ones, and they might still be unable to repay debts due to the challenges in home sales or financing by themselves,” he said.

The impact on banks from their increased lending to embattled property developers will be mixed, analysts said, as they balance heeding Beijing’s calls to support the sector with the need to ward off risks.

“Asset quality might be under challenge and the non-performing ratio for real estate will stay high for banks in the coming months,” Ng said.

While banks are responding to regulatory calls to bolster the sector, most of the new loans will go to state-backed developers, Shujin Chen, analyst with Jefferies, said in a note on Thursday.

“Private developers that already defaulted on public debts will still struggle,” she said.

The sector has been reeling under mounting debts, defaults, slower sales and construction suspensions, after the authorities initiated a campaign to rein in excessive borrowing by developers.

Several developers have defaulted on their offshore debt obligations over the past year, fuelling a sector-wide downturn that has weighed on the world’s second-largest economy.

To ease the liquidity crunch, the central bank on Wednesday issued a notice outlining 16 steps to support the sector.

(USD 1 = 7.1430 Chinese yuan renminbi)

(USD 1 = 7.1479 Chinese yuan renminbi)

(Reporting by Xie Yu and Ziyi Tang; Editing by Sumeet Chatterjee, Edmund Klamann, Kirsten Donovan)

Shares rise, US Treasury yields drop as Fed minutes suggest slower rate hikes

NEW YORK, Nov 23 (Reuters) – World equities rose while US Treasury yields retreated on Wednesday after minutes of the Federal Reserve’s latest policy meeting showed US central bankers looking to soon moderate the pace of interest rate hikes.

A “substantial majority” of Fed policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes, the meeting minutes showed. Traders had expected the Fed minutes would affirm officials’ softening stance after recent data showed a moderation in economic conditions.

US Labor Department data on Wednesday showed jobless claims increased more than expected last week. US business activity contracted for a fifth month in November, according to the S&P Global flash US Composite PMI Output Index.

“I didn’t really think there were any surprises. They seem to still be pointing out that the risks of inflation are still high and recent data has been more persistent than they thought,” said Jordan Kahn, chief investment officer at ACM Funds in Los Angeles.

“People are going to get excited when they see that some participants were mentioning the need to slow the pace of rate hikes. But the market was already pricing in a 50 basis point rate hike for December and the odds in the Fed futures market of a 50-basis point hike was already 70% going into this minutes,” Kahn added.

The MSCI All Country stock index was up 0.85%, while European shares rose 0.6%.

US Treasury yields traded lower after the Fed minutes. Benchmark 10-year notes were down to 3.6908% while the yields on two-year notes dropped to 4.4773%.

The yield curve that compares these two bonds was still in negative territory, at -76.30 basis points. When inverted, that part of the curve is seen as an indicator of an upcoming recession.

“The Fed has been hiking rates at 75 basis points and it was just unrealistic for them to continue at that pace,” Kahn added.

On Wall Street, all three major indexes closed higher, led by gains in technology, consumer discretionary, communications, healthcare and industrial stocks.

The Dow Jones Industrial Average rose 0.28% to 34,194.06, the S&P 500 gained 0.59% to 4,027.26 and the Nasdaq Composite added 0.99% to 11,285.32.

Oil prices fell more than 3%, continuing a streak of volatile trading as the Group of Seven (G7) nations considered a price cap on Russian oil above the current market level and as gasoline inventories in the United States built by more than analysts’ expected.

Brent futures for January delivery fell 3.3% to settle at USD 85.41 a barrel, while US crude fell 4.36% to USD 77.42 per barrel.

The US dollar fell across the board after the Fed minutes. The dollar index fell 0.915%, with the euro up 0.9% to USD 1.0395.

Gold prices climbed as the US dollar fell. Spot gold added 0.5% to USD 1,749.40 an ounce, while US gold futures gained 0.66% to USD 1,749.70 an ounce.

(Reporting by Chibuike Oguh in New York; Editing by Bernadette Baum, Will Dunham and David Gregorio)

At November Fed meeting, officials flagged market resilience amid volatile conditions

NEW YORK, Nov 23 (Reuters) – When Federal Reserve officials met at the start of the month to weigh another rate increase, some of them were thinking about what the central bank might have to do should the Treasury market run into trouble.

Those concerns were aired in meeting minutes for the rate-setting Federal Open Market Committee’s Nov. 1-2 policy meeting, released Wednesday. Then, officials pressed forward with aggressive rate increases that are part of a campaign to lower the highest levels of inflation seen in 40 years.

The speed of Fed rate hikes, which have also been joined with ongoing central bank action to shed Treasury and mortgage bonds to contract the size of its balance sheet, have generated worries the Fed could break something in financial markets.

Thus far, the Treasury market, which serves as the backbone of the world’s credit system, has held together, although there has been ample concern about low liquidity that’s made trading difficult. Fed officials have thus far described the market as resilient.

“Participants observed that, despite elevated interest rate volatility and indications of strained liquidity conditions, the functioning of the Treasury securities market had been orderly,” the minutes said. Fed staff briefing officials concurred,

The minutes flagged recent events in Britain as a point of concern. There, the central bank was forced to intervene and buy bonds to restore market stability, in a policy that ran counter to the Bank of England’s overall effort to tighten, rather than loosen the stance of monetary policy. Some have worried the Fed might have to restart asset buying in the United States should some sort of trouble develop, and some in Congress have already warned the Fed not to go down this road.

According to the minutes, “a few participants noted the importance of being prepared to address disruptions in U.S. core market functioning in ways that would not affect the stance of monetary policy, especially during episodes of monetary policy tightening.”

The minutes, however, did not say what the Fed could do to calm markets in the face of trouble without taking action to buy bonds, as the central bank did in late 2019 and in the spring of 2020, when markets became unsettled.

Some observers have said a Fed tool called the Standing Repo Facility, which allows eligible firms to quickly convert Treasuries into cash loans, could be an important tool in restoring liquidity. That facility was adopted in the summer of 2021 and is as yet untested.

The minutes also said “several participants noted the risks posed by nonbank financial institutions amid the rapid global tightening of monetary policy and the potential for hidden leverage in these institutions to amplify shocks.”

The discussion on financial stability reflected in the minutes took place before the latest shocks to market stability emerging from the nonbank sector – specifically the cryptocurrency space. It was not until after officials had adjourned their meeting that crypto exchange FTX collapsed and filed for bankruptcy, and it appears that other failures are in the offing.

The Fed’s top financial stability official, Vice Chair for Supervision Michael Barr, last week told Congress he was worried about “blowback” to the wider financial system from crypto-related failures.

“We’re concerned about the risks that we don’t know about in the nonbank sector,” Barr told the Senate Banking Committee.

(Reporting by Michael S. Derby; Editing by Andrea Ricci)

Dollar down as Fed minutes, US data weighs

NEW YORK, Nov 23 (Reuters) – The US dollar fell across the board on Wednesday, after minutes from the Federal Reserve’s November meeting showed that most policymakers at the central bank agreed it would soon be appropriate to slow the pace of interest rate hikes.

The readout of the Nov. 1-2 meeting, at which the Fed raised its key rate by three-quarters of a percent for the fourth straight time in an effort to combat decades-high inflation, showed officials were largely satisfied they could stop front-loading the rate increases and move in smaller steps.

The minutes also showed an emerging debate within the Fed over the risks the rapid policy tightening could pose to economic growth and financial stability, even as policymakers acknowledged there had been little demonstrable progress on inflation and that rates still needed to rise.

“The Fed has raised rates faster than in any period in recent history and now they want more time to judge the impacts of their actions,” said Moez Kassam, a portfolio manager at Anson Funds in Toronto.

The euro was up 0.87% against the dollar at USD 1.03925, at 2:20 p.m. EST (1920 GMT), on pace for a second straight session of gains.

Data on Wednesday showed US business activity contracted for a fifth straight month in November, with a measure of new orders dropping to its lowest level in 2-1/2 years as higher interest rates slowed demand.

Other data showed the number of Americans filing new claims for unemployment benefits increased more than expected last week, even though labor market conditions remain tight.

This year, the dollar has rallied against every major currency, boosted by the Fed’s supersized rate hikes. But recent cooler-than-expected US consumer price data has spurred investors’ hopes that the Fed may be in a position to moderate its pace of hikes.

Sterling shot higher on Wednesday, rising for a second straight day against the dollar after preliminary British economic activity data beat expectations, though it still showed contraction was underway.

The pound was last up 1.43% at USD 1.2055.

“Cable has been testing 1.20 for a while now and the break past that has given the market a green light to move higher,” said Lee Hardman, senior currency analyst at MUFG in London.

“Fundamentally it’s more of a broader sell off in the dollar on the back of weaker US data and PMIs that came in weaker in the US than in Europe.”

Against the yen, the dollar slipped 0.33% to 144.905 yen.

The New Zealand dollar hit a three-month high, after the country’s central bank lifted interest rates by a record amount despite warning the economy might spend an entire year in recession.

The kiwi was up 1.34% on the day at USD 0.62375. NZD=D3

The Reserve Bank of New Zealand raised its benchmark rate by 75 basis points to 4.25% – the highest of any G10 economy.

Cryptocurrencies, which have come under intense selling following the high profile collapse of crypto exchange FTX, remained choppy, with bitcoin up 1.52% at USD 16,443.

(Reporting by Saqib Iqbal Ahmed and John McCrank
Additional reporting by Alun John in London and Carolina Mandl in New York
Editing by Nick Zieminski and Mark Potter)

China markets end higher on fresh property support, HK tracks Wall St gains

HONG KONG, Nov 23 (Reuters) – China stocks traded in a tight range and ended higher on Wednesday, helped by the latest round of property financing support policies, including the central bank’s 200 billion loans.

Shares in Hong Kong rebounded after a 5-day losing streak, as gains in US stocks overnight helped the local market.

** China’s blue-chip CSI 300 Index edged up 0.1%, while the Shanghai Composite Index advanced 0.26%.

** Hong Kong’s Hang Seng Index rose 0.57% and the Hang Seng China Enterprises Index climbed 0.74%.

** China’s Bank of Communications agreed to provide a 100-billion-yuan credit line to developer Vanke in the latest sign of support for the embattled property sector.

** China’s central bank will provide 200 billion yuan in loans to six commercial banks for housing completions, according to a deputy central bank official quoted by the state-run Economic Daily on Monday.

** Asian share markets mostly rose on Wednesday, but oil and the dollar slipped as rising COVID-19 cases in China raised fears of fresh lockdowns that could slow the reopening of the world’s second-largest economy.

** China reported 29,157 new cases for Nov. 22 vs 28,127 a day earlier.

** Beijing shut parks and museums on Tuesday and Shanghai tightened rules for people entering the city as authorities grappled with a spike in infections.

** “Market sentiment cooled a bit after a strong rally in the first half of November,” said Linus Yip, a strategist at First Shanghai Securities, adding overall sentiment leaned towards the positive side, driven by the COVID-19 policy pivot and slowing US interest rate hikes.

** Yi Huiman, chairman of the China Securities Regulatory Commission, said on Monday that China will explore ways to establish a capital market with “Chinese characteristics” so market resources can be allocated more effectively.

** Liquidity conditions in China’s interbank money markets eased further on Tuesday, as cash supply far outpaced demand.

** State-owned companies were the outperformers in A-shares, with infrastructure names jumping 1.2% and banks rising 0.3%.

** Energy and real estate stocks also rose 1.2% and 0.1%, respectively.

** In Hong Kong, Alibaba jumped 3.2% after Reuters reported Chinese authorities are poised to impose a fine of more than USD 1 billion on its affiliate Ant Group, setting the stage for ending the fintech company’s two-year-long regulatory overhaul.

** Hang Seng Tech advanced 1.1%, while Hong Kong-listed mainland properties gained 1.7%.

(Reporting by Summer Zhen; editing by Uttaresh.V and Savio D’Souza)

Oil prices edge higher as large US crude stock drop outweighs China demand worries

SINGAPORE, Nov 23 (Reuters) – Oil prices inched higher on Wednesday as data showing a larger-than-expected US crude drawdown last week outweighed concerns about lower fuel demand from China amid tightening COVID-19 curbs.

Brent crude futures rose 27 cents, or 0.3%, to USD 88.63 a barrel at 0719 GMT, while US West Texas Intermediate (WTI) crude futures gained 25 cents, or 0.3%, to USD 81.20 a barrel.

Both benchmark contracts rose about 1% on Tuesday as the United Arab Emirates, Kuwait, Iraq and Algeria reinforced comments from Saudi Arabia’s energy minister that the Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, were not considering boosting oil output. OPEC+ next meets to review output on Dec. 4.

US crude inventories fell by about 4.8 million barrels for the week ended Nov. 18, data from the American Petroleum Institute showed, according to market sources.

Analysts polled by Reuters on average had expected a 1.1 million barrel drawdown in crude inventories.

Distillate stocks, which include heating oil and jet fuel, rose by about 1.1 million barrels compared with analysts’ expectations for a drop of 600,000 barrels.

Uncertainty over how Russia will respond to plans by the Group of Seven (G7) nations to cap Russian oil prices also provided some support to the market.

The price cap is due to be announced soon, a senior US Treasury official said on Tuesday, adding that it will probably be adjusted a few times a year.

“Traders closely monitor Russia’s exports and will look for how much they might trim the nation’s foreign sales in retaliation, which could be a bullish fillip for oil prices,” SPI Asset Management managing partner Stephen Innes said in a note.

Meanwhile, top crude oil importer China has been grappling with a surge in COVID cases that has deepened worries about its economy and may continue to cap gains of oil prices, CMC Markets analyst Tina Teng said.

Late on Tuesday, financial hub Shanghai tightened rules for people entering the city while Beijing shut parks and museums.

Teng said that traders are also being cautious ahead of the release of the US Federal Reserve’s minutes from its November policy meeting due at 1900 GMT.

“The Fed is expected to signal a slowdown in rate hikes but any surprising hawkish reiteration will weigh on sentiment, lifting the US dollar and pressuring commodity prices,” Teng said.

(Reporting by Sonali Paul in Melbourne and Isabel Kua in Singapore; Editing by Kenneth Maxwell and Ana Nicolaci da Costa)

World shares rise, US Treasury yields fall ahead of Fed minutes

NEW YORK, Nov 22 (Reuters) – Global equities rose on Tuesday while US Treasury yields fell as investors awaited the release of the Federal Reserve’s meeting minutes for clues on US interest rates and as China’s COVID-19 restrictions weighed on sentiment.

The Fed will release minutes of its November policy meeting on Wednesday, offering a glimpse of how officials view economic conditions.

In China, authorities in Beijing shut parks and museums. In Shanghai rules were tightened for people entering the city as the country grapples with a spike in COVID cases, sparking worries about its impact on the economy.

“People are going to be poring over word-for-word those minutes to see if it will tilt towards the Fed’s official statement versus what Powell’s press conference implied, which was that they are not going to be looking at cumulative effect in considering when to stop this tightening,” said Tom Plumb, portfolio manager at Plumb Balanced Fund in Madison, Wisconsin.

The MSCI All-World index of shares rose 1.18%, while European shares gained 0.73%.

Benchmark 10-year Treasury yields were down to 3.7634% while the yield on the 30-year note fell to 3.8325%.

On Wall Street, all three main indexes closed higher led by gains in technology, energy, healthcare, financials, and consumer discretionary.

The Dow Jones Industrial Average .DJI rose 1.18% to 34,098.1, the S&P 500 gained 1.36% to 4,003.58 and the Nasdaq Composite added 1.36% to 11,174.41.

“We’re seeing technology, consumer discretionary and energy leading downside momentum while consumer staples stocks leading the upside, these are signs of investors positioning for a downturn,” said Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles, California.

The US dollar retreated across the board, ceding some of the ground gained in the previous session, as investors looked past worries about China’s COVID flare-ups, boosting demand for more risky currencies. The dollar index fell 0.566%, with the euro EUR= up 0.58% to USD 1.03.

Crude prices rose about 1% after Saudi Arabia said OPEC+ was sticking with output cuts and could take further steps to balance the market.

Brent crude rose 1% to settle at USD 88.36 per barrel, while US West Texas Intermediate (WTI) crude was up 1.1% at USD 80.95.

Safe-haven gold prices steadied above last session’s low as a retreat in the dollar and benchmark US Treasury yields was offset by a rise in equities. Spot gold added 0.1% to USD 1,740.19 an ounce, while US gold futures gained 0.23% to USD 1,738.30 an ounce.

(Reporting by Chibuike Oguh in New York; Editing by David Gregorio and Marguerita Choy)

S&P closes at more than two-month high on retail, energy lift

NEW YORK, Nov 22 (Reuters) – US stocks rallied on Tuesday, with the S&P 500 closing at its highest level in 2-1/2 months, as a sales forecast by Best Buy dampened concerns high inflation would lead to a dismal holiday shopping season while a bounce in oil prices helped lift energy shares.

Best Buy Co Inc shot up 12.78% as the best performing stock on the S&P 500 index, after the retailer forecast a smaller drop in annual sales than previously announced and expressed confidence a ramp up in deals and discounts will entice more customers.

The gains in Best Buy helped boost the S&P 500 retail .SPXRT index 1.21%.

In contrast, Dollar Tree Inc tumbled 7.79% as the worst performing S&P 500 component, which also capped gains for the retail index as the discount retailer cut its annual profit forecast for the second time.

“If you take the continuum of income and consumers out there, the upper half of that is relatively inelastic to some costs going up to some extent or another where the bottom half is going to be more sensitive,” said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago.

“So the Dollar Trees of the world really don’t have much ability to pass through those costs so they are going to get hit pretty bad.”

The Dow Jones Industrial Average rose 397.82 points, or 1.18%, to 34,098.1, the S&P 500 gained 53.64 points, or 1.36%, to 4,003.58 and the Nasdaq Composite added 149.90 points, or 1.36%, to 11,174.41.

The S&P 500 closed at its highest level since Sept. 12.

Also providing support was the energy sector, which climbed 3.18% after two sessions of declines as Saudi Arabia said OPEC+ was sticking with outputs cuts, shooting down a report on Monday that said the alliance was considering increasing output which sent crude prices sharply lower.

As investors continue to try and gauge the path of Federal Reserve rate hikes, Cleveland Fed President Loretta Mester reiterated on Tuesday that lowering inflation remains critical for the central bank, a day after supporting a smaller rate hike in December. Kansas City President Esther George said the central bank may need to boost interest rates to a higher level and hold them there for longer in order to temper consumer demand and cool inflation.

Investors were also awaiting remarks by St. Louis Fed Reserve President James Bullard on Tuesday ahead of the minutes from the Fed’s November meeting scheduled for Wednesday.

Volume was light for the session and is likely to dwindle heading into the Thanksgiving holiday on Thursday, with the US stock market open for a half-session on Friday.

Volume on US exchanges was 9.45 billion shares, compared with the 11.75 billion average for the full session over the last 20 trading days.

Dow component Walgreens Boots Alliance Inc rose 2.96% after Cowen & Co upgraded the drug distributor stock, citing its healthcare services business push.

Manchester United shares jumped late in the session after Sky News reported the Glazer family, which owns the football club, was exploring financial options that could include an outright sale, and closed 14.66% higher.

Agilent Technologies Inc climbed 8.08% after the application-focused solutions company posted upbeat fourth-quarter revenue.

Declines in the dollar and US Treasury yields also helped support risk appetite.

Advancing issues outnumbered declining ones on the NYSE by a 3.40-to-1 ratio; on Nasdaq, a 1.56-to-1 ratio favored advancers.

The S&P 500 posted 24 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 108 new highs and 224 new lows.

(Reporting by Chuck Mikolajczak; editing by Grant McCool)

Dollar slips as investors tiptoe back into riskier currencies

NEW YORK, Nov 22 (Reuters) – The dollar retreated across the board on Tuesday, ceding some of the ground gained in the previous session, as investors looked past worries about China’s COVID flare-ups, boosting demand for more risky currencies.

Equities, commodities, and riskier currencies were largely firmer on Tuesday, a day after fresh COVID-19 curbs in China fuelled worries over the global economic outlook.

The euro rose 0.5% against the dollar to USD 1.02965, on pace to snap a three-session streak of losses.

“The tentative recovery in risk appetite has been enough to stall the dollar’s several-day rebound,” said Joe Manimbo, senior market analyst at Convera in Washington.

“Fed minutes loom tomorrow but for the most part range trading is dominating ahead of the US holiday,” Manimbo said, referring to the Thanksgiving holiday on Thursday.

The dollar has rallied against every major currency this year, boosted by the Federal Reserve’s supersized interest rate hikes as it battles inflation. But recent cooler-than-expected US consumer price data has spurred investors’ hopes that the Fed may be able to moderate its pace of hikes.

Federal Reserve Bank of Cleveland President Loretta Mester reiterated Tuesday that getting inflation down remains critical for the central bank.

Investors will be parsing minutes from the Fed’s November meeting, due on Wednesday, for any hints about the outlook for interest rates.

“The Fed’s hawkish outlook is keeping a floor under the dollar but expectations of a slower pace of tightening is capping rallies,” Convera’s Manimbo said.

Tuesday’s revival in risk appetite helped lift the Australian dollar 0.6%, while the New Zealand dollar NZD=D3 rose 0.9% as traders braced for New Zealand’s central bank to deliver its biggest ever rate hike this week as it continues efforts to temper inflation.

Sterling was 0.6% higher at USD 1.1885 after data showed Britain’s government borrowed less than expected in October, although the budget deficit is likely to balloon in the months ahead thanks to energy bill support measures and a slowing economy.

In cryptocurrencies, bitcoin was 2.5% higher at USD 16,161, a day after falling to a new two-year low of USD 15,479 amid jitters about the health of crypto broker Genesis.

Genesis said on Monday it has no plans to file for bankruptcy imminently, though Bloomberg News reported, citing sources, that the broker was struggling to raise fresh cash for its lending unit, and warning investors it may need to file for bankruptcy if it does not find funding.

The lending unit suspended redemptions last week, citing fallout from the collapse of FTX, which filed for bankruptcy on Nov. 11.

(Reporting by Saqib Iqbal Ahmed; Editing by Tomasz Janowski and Mark Heinrich)

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