Left Menu
Development News Edition

Dollar scales 16-month peak, yen edges lower

The yen changed hands at 113.24 on the dollar, remaining under pressure in Asia after earlier sliding to three-week lows at 113.32.


Dollar scales 16-month peak, yen edges lower
The yen changed hands at 113.24 on the dollar, remaining under pressure in Asia after earlier sliding to three-week lows at 113.32. The dollar had gained 0.6 per cent on the yen the previous day.

The Japanese yen edged lower against the dollar on Wednesday after the Bank of Japan signalled it was a long way off from exiting crisis-era stimulus, while the greenback scaled 16-month highs versus its key rivals on continued strength in the U.S. economy.

The Bank of Japan (BoJ) kept monetary policy steady on Wednesday and cut its price forecasts, reinforcing market expectations that subdued inflation will force it to maintain its massive stimulus programme for the time being.

In a widely expected move, the BOJ maintained its short-term interest rate target at minus 0.1 per cent and a pledge to guide 10-year government bond yields around zero per cent.

The yen changed hands at 113.24 on the dollar, remaining under pressure in Asia after earlier sliding to three-week lows at 113.32. The dollar had gained 0.6 per cent on the yen the previous day.

"I still see the main driver for the dollar/yen be U.S. 10 year bond yields and the overall level of risk aversion in the system which can be gauged by the VIX index," said Sim Moh Siong, currency strategist at Bank of Singapore.

The U.S. 10-year treasury bond yields rose for the third consecutive trading session on Wednesday and were last at 3.13 per cent. The 10-year Japanese government bond yield was 0.12 per cent, highlighting the wide gap in favour of the dollar.

The dollar index, a gauge of its value versus six major peers, climbed to a fresh 16-month high to hit 97.06.

The U.S. currency benefited from stronger than expected U.S. economic data as well as deteriorating fundamentals for the euro, which makes up around 58 per cent of the index.

U.S. consumer confidence rose to an 18-year high in October, driven largely a robust labour market, suggesting strong economic growth could persist in the near term. That follows last week's data which showed the U.S. economy slowed less than expected in the third quarter.

In contrast, economic data out of Europe disappointed analysts as the eurozone economy grew less than expected in the third quarter.

The euro changed hands at $1.1343, steady from its New York close, though it has lost 2.3 per cent versus the greenback in October.

Political uncertainty in Germany, following Chancellor Angela Merkel's decision to step down in 2021, is also pressuring the single currency. Moreover, the stand-off between Rome and Brussels over Italy's free-spending budget, which is in breach of the European Union's fiscal rules, has weighed on the euro.

Philip Wee, currency strategist at DBS, said in a note to clients that the gloomy backdrop might push the euro down to $1.12 in the current quarter, and is tipping an even lower $1.05-1.10 range in the first half of 2019.

The sterling held close to its mid-August lows, hovering at $1.2705, after credit rating agency Standard & Poor's said a 'no-deal' Brexit would be likely to tip Britain into a recession on Tuesday.

Some immediate catalysts for the sterling traders could come from the Bank of England's monetary policy meeting on Thursday when it is expected to keep interest rates on hold and detail conditions necessary for policy tightening.

The yuan was relatively flat in onshore trading at 6.9663, though it remains on a downward path after it fell to its lowest level in a decade this week.

With no sign of a let-up in the Sino-U.S. trade war, investors are betting on more weakness ahead and expect authorities will eventually allow the yuan to breach the key 7 to the dollar level for the first time since the global financial crisis.

The Australian dollar dipped 0.3 per cent to $0.7084 after the release of tepid inflation data reinforced views that a rate increase remains a distant prospect.

(With inputs from agencies.)


TRENDING

OPINION/BLOG/INTERVIEW

Hyderabad Encounter: Time to review modern judiciary and restore people’s confidence

Its probably for the first time in the history of independent India, the parliamentarians, chief ministers and ministers in the Union and State governments are openly supporting an encounter. This indicates the people from top to bottom hav...

What happens to your outstanding loans if the bank falls?

... ...

Time for a change! Innovations to stop the growing plastic pollution

As the planet is drowning in plastic pollution, many new innovative approaches and solutions have emerged to effectively deal with the menace....

How to avoid fake universities and fishing bait like Farmington

As education sharks are roaming around to prey, we present a guide on how to mitigate hunters and reach to a genuine universityinstitute. In this era of commercialization of education, the fake universities and economic frauds in educationa...

Videos

Latest News

Mavericks pile on to send Pelicans to 8th straight loss

Luka Doncic scored 26 points as Dallas stayed hot while the New Orleans Pelicans remained cold in the Mavericks 130-84 victory Saturday afternoon. Boban Marjanovic added 15 points and 16 rebounds, Tim Hardaway Jr. and Jalen Brunson scored 1...

Fire breaks out in Delhi, several people feared dead

Several people are feared dead after a fire broke out in a house in Anaj Mandi on Rani Jhansi Road here on Sunday morning, a Delhi Fire Service official said. A call about the fire was received at 522 AM following which 30 fire tenders were...

Avs G Grubauer, D Makar leave early with injuries

The Colorado Avalanche lost two key players to injuries in Saturdays win over the Boston Bruins, as top goaltender Philipp Grubauer and rookie star defenseman Cale Makar each left and did not return. Head coach Jared Bednar told reporters a...

Mavericks pile on to send Pelicans to 8th straight loss

Luka Doncic scored 26 points as Dallas stayed hot while the New Orleans Pelicans remained cold in the Mavericks 130-84 victory Saturday afternoon. Boban Marjanovic added 15 points and 16 rebounds, Tim Hardaway Jr. and Jalen Brunson scored 1...

Give Feedback