Dollar Stable, Yen Weakens After BOJ Meeting

Dollar Stable, Yen Weakens After BOJ Meeting
Dollar Stable, Yen Weakens After BOJ Meeting
© Reuters.

By Peter Nurse – The U.S. dollar stabilized in early European trade Friday ahead of the release of key inflation data, while the Japanese yen edged lower after the Bank of Japan on Friday maintained its ultra-low interest rates and dovish stance.

At 03:05 ET (07:05 GMT), the , which tracks the greenback against a basket of six other currencies, traded flat at 110.475, after posting a near 0.8% gain overnight.

The dollar saw some strength on Thursday in the wake of a sharp fall in the euro, which has the heaviest weighting in the index, after the raised rates by 75 basis points, as expected, but took a more dovish tone on its rate outlook.

However, this followed previous weakness as expectations for a pivot by the to a less aggressive pace of monetary tightening have increased.

With this in mind, traders will focus on the release of the , the Fed’s favorite inflation gauge, later in the session for clues of the central bank policymakers’ intentions at next week’s policy-setting meeting. This is expected to show a increase of 0.5% in September, a slight drop from 0.6% the previous month.

rose 0.1% to 146.43 after the left unchanged its -0.1% target for short-term interest rates and its pledge to guide the bond yield around 0%.

The Japanese central bank, however, revised up its inflation forecasts through 2024, indicating more near-term pain for the Japanese economy and piling more pressure on the currency.

rose 0.1% to 0.9969, pushing close to parity after sharp losses overnight as the European Central Bank hinted at a less aggressive pace of rate hikes, dropping a reference to increasing rates “over the next several meetings” that had been in its September statement.

France’s expanded 0.2% in the third quarter, an official preliminary reading showed on Friday, in line with expectations, but a drop from the 0.5% quarterly growth seen in the previous quarter.

fell 0.3% to 1.1526, handing back some of the week’s near 2% gains on optimism that new British Prime Minister Rishi Sunak will adopt a more fiscally prudent stance than his predecessor Liz Truss set out in her brief tenure.

fell 0.2% to 0.6433, rose 0.1% to 0.5832, while rose 0.1% to 7.2367, as China introduced new COVID lockdown measures, increasing uncertainty over the extent of its recovery.

Leave a Reply

Your email address will not be published. Required fields are marked *

New Brokers
2.8 rating
Buy & sell Crypto in minutes
3.0 rating
Note: Investing involves risks. You can lose your deposit. We advise you to only invest in financial products which match your knowledge and experience.
2.0 rating
Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform.
4.3 rating
eToro is the world’s leading social trading platform, with thousands of options for traders and investors.
Risk Warning: The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by AdonFinance. In addition, the content of the website offers no opinion with respect to the suitability of any security or any specific investment. Trading foreign exchange, stocks, cryptocurrencies and commodities is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before any investment with any broker you need to carefully consider your targets, previous experience, and risk level. Forex trading can result in the loss of your money, as a result, you are expressly cautioned that you should never invest or trade with money that you cannot afford to lose. For the avoidance of doubt, AdonFinance's service provides Brokers reviews in the Financial market. AdonFinance, its subsidiaries, agents or affiliates will assume no responsibility whatsoever for your trading activity. © Copyright 2021 AdonFinance