A downdraft in the dollar took a pause on Thursday as investors began hunkering down ahead of a slew of central bank meetings next week, where hawkish holds are expected on interest rates in Japan, the US and Europe. The currency market is long the dollar on the assumption the AI boom keeps the US economy humming and that strong growth supports interest rates staying higher for longer.

Recent gains for sterling and currencies in Canada, Australia and New Zealand, all of which have lately touched their highest on the dollar in several weeks, suggest dollar bets have been pared a bit, though moves on Thursday were slight. 33955.

5709. Reserve Bank of Australia Deputy Governor Andrew Hauser said on Wednesday that the inflation outlook was looking "materially worse" in part due to high oil prices, pushing up market bets on whether the next hike in Australia comes as soon as next month.

4032 per dollar. The euro and yen have settled into tight ranges, with the threat of intervention and prospect of rate hikes holding Japan's currency around 158 to the dollar.

The euro has spent about a month on the slide, emerging as a favoured channel for putting a bet on a stronger dollar, as fiscal concerns in France and Europe's energy fragility attract short sellers. French 10-year yields hit their highest since 2022 on Wednesday as weekend unrest across France, fuelled in part by cuts to public services, has highlighted how politically difficult it will be to bring budget deficits under control.

12." The euro cannot sell off-and it cannot rally," said Spectra Markets' president Brent Donnelly.

" We are in a stalemate where the overhang of bad news just about perfectly offsets the market positioning." 5% next week, though a hike is all but priced in before the year's end.

5% - expected early next year. 75-4%, but hiking in December.