The yen hit a new 20-year low against the dollar on Wednesday and slipped to a seven-year low against the euro as traders waited for a meeting of the European Central Bank that would likely leave Japan alone among peers in hold. ultra easy monetary policy.
The ECB meets on Thursday and markets expect it to at least lay the groundwork for rapid rate hikes, if they do not start with a small hike.
The US Federal Reserve is expected to raise its benchmark fund level next week by 50 basis points and again in July, but Bank of Japan (BOJ) officials have not given any indication of leaving accommodation institutions.
The yen has lost more than 4.5% from 127.09 per dollar to 133.22 in eight sessions, hitting crosses as investors see rising consumer prices forcing central banks around the world to shrink demand with fast hikes.
The yen last traded at 133.02 per dollar.
It has fallen more than 6% in 10 sessions after a seven-year low of 96.12 per Australian dollar, accelerating the slide to a surprisingly large rate hike in Australia on Tuesday.
It is 10 sessions in a row down on the euro, its longest losing streak in eight months, and found a seven-year low of 142.36 early in Asian trade.
“Yield differences continue to favor the U.S. dollar, with USD / JPY breaking above 132,” said Matt Simpson, a senior market analyst at brokerage City Index. “It is clear that the BOJ is avoiding defending control over the yield curve over a weaker currency,” he said. “135 is the next big line in the sand” the height of February 2002.
Other movements were fairly modest in Asia, as traders waited for the ECB and for US inflation figures to be expected on Friday.
The dollar stabilized after a slight dip in line with U.S. yields overnight.
It was a fraction faster on the risk-sensitive Australian and New Zealand dollars, leaving the Aussie at $ 0.7223 and kiwi at $ 0.6473.
The euro declined marginally to $ 1.0689, while the sterling hovered at $ 1.2575. “With quantitative easing replacing quantitative easing and 100 basis points of Fed rate hikes coming this summer, you are buying bonds and selling the dollar at your risk,” said Societe Generale strategist Kit Juckes.
Yen slips as Europe clings to rate hikes – SABC News
Source link Yen slips as Europe clings to rate hikes – SABC News