* Cautious risk sentiment supports dollar vs riskier currencies * ECB seen trimming pace of PEPP, but pledging copious support * Chinese yuan steady after jump in China PPI * Brazilian real, Turkish lira suffer big losses By Hideyuki Sano TOKYO, Sept 9 (Reuters) - The dollar was supported on Thursday as doubts over the global economy's strength subdued risk sentiment, while the euro steadied ahead of a European Central Bank policy meeting later in the day that is expected result in a reduction in stimulus. "One big difference versus Q4 or Q1 is that the range of economic and inflation consequences is much wider given the uncertainties on how COVID and inflation evolve," said Steve Englander, head of global FX Research at Standard Chartered Bank's New York Branch.
Volatility in high-risk, high-return emerging market currencies is set to persist amid fears of a "taper tantrum" once the U.S. Federal Reserve starts cutting its bond buying, according to analysts who say a sell-off is likely in the next three months. A majority of FX strategists in the Aug. 30-Sept. 2 Reuters poll said recent dollar weakness would be temporary as the day the Fed eventually decides to taper its $120 billion of monthly purchases approaches, likely pushing U.S. yields higher. High-beta currencies - those with the most risk but also offering the greatest potential for returns such as the Brazilian real and South African rand - are set to drive overall currency volatility over the next 12 months.
The Brazilian real's exchange rate of around 5.00 per U.S. dollar is benefiting the country's poorest families because more Brazilians are choosing to take domestic vacations rather than go abroad, Economy Minister Paulo Guedes said on Wednesday. In testimony to the lower house of Congress, Guedes said the weak exchange rate relative to where it was a few years ago is boosting domestic tourism, which in turn is benefiting the poor.