FOREX-Dollar clings on, yen creeps higher as Fed speakers in focus

* Dollar index broadly steady, majors creep higher
* Yuan edges up ahead of FTSE Russell bond index decision
* Japan holiday thins trade
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, Sept 21 (Reuters) - The dollar clung to late-week
gains on Monday, while the yen and yuan each edged higher, as
investors looked ahead to a slew of U.S. Federal Reserve
speakers this week and to a decision on the inclusion of Chinese
government bonds in a global index.
Chinese bond buying by foreigners has helped drive the yuan
up more than 1% this month and it crept back toward a 16-month
peak hit last week in early offshore trade, rising 0.2% to
6.7648 per dollar CNH=D3 . CNY/
Inclusion in the FTSE Russell World Government Bond Index
.SBWGU is likely to boost inflows and support the currency. A
decision from FTSE Russell is due on Thursday.
"People are trying to get in ahead of that," said
Commonwealth Bank of Australia currency analyst Joe Capurso.
China's benchmark lending rate is also fixed at 0100 GMT and
is expected to be held steady for a fifth straight month.
Other moves were modest and volumes light owing to a public
holiday in Japan.
Against a basket of currencies =USD the dollar was steady
at 92.943, roughly in the middle of a range it has kept for
about two months.
The euro EUR= inched higher to $1.1847 and the pound
GBP= moved up to $1.2933, though trepidation about rising
coronavirus cases in Europe and Brexit turmoil kept a lid on
gains.
European countries from Denmark to Greece announced new
restrictions last week to curb surging infections, while Britain
was reported to be considering a new national lockdown.
The yen JPY= , which had its best week since June last
week, tacked on 0.07% to 104.50 per dollar.
That is not far from a seven-week high of 104.27 hit on
Friday, which came as uncertainty over everything from the U.S.
election to the global economic recovery had investors seeking
safety, and as U.S. real yields sink lower.
Fed Chairman Jerome Powell is due to appear before
Congressional committees later this week while Fed committee
members Charles Evans, Raphael Bostic, Lael Brainard, James
Bullard, Mary Daly and John Williams also make public speeches.
Their opinions on how the Fed should handle its more
accommodative approach to inflation could drive further yen
strength if they imply looser monetary policy settings.
"The yen is an attractive currency, I see no reason to sell
it," said Chris Weston, head of research at Melbourne brokerage
Pepperstone, noting that real yields in Japan are positive.
"This makes the yen very attractive, especially against the
pound and dollar, where real rates are not just negative but in
the case of the Fed, they are actively seeking lower rates out."
Elsewhere the New Zealand dollar NZD=D3 was flat at
$0.6762, lagging a 0.2% gain in the Australian dollar AUD=D3
to $0.7301 ahead of a Reserve Bank of New Zealand rate-setting
meeting later in the week.
No policy changes are expected at the Wednesday RBNZ
meeting, but hints at negative rates, or adjustments to the
bank's large-scale asset purchase (LSAP) bond-buying programme
could drive volatility in the kiwi.
"We don't expect any change on policy, but the tone will be
dovish and they may signal an intention to flex the pace of the
LSAP more to help flatten the curve, which would take pressure
off the kiwi," ANZ analysts said in a note on Monday.