Upcoming News

FOREX-Yen under pressure, U.S. data disappoints dollar bulls

730-90 fxcaptain

The yen nursed broad losses early on Tuesday and even underperformed a defensive greenback, which sagged on the back of disappointing U.S. economic data.

Traders said speculation of more monetary stimulus and talk that Japanese Prime Minister Shinzo Abe will delay an unpopular sales tax hike and call a snap election appeared to be keeping the yen under pressure.

The dollar, euro and sterling all hit two-week highs against their Japanese peer. The greenback climbed as far as 113.69 yen , the euro reached 127.05 and sterling touched 161.86 yen. The dollar last stood at 113.45.

Sellers also took aim at the greenback after soft U.S. consumer spending prompted economists cut their first-quarter gross domestic product growth estimates.

The Atlanta Federal Reserve’s GDPNow forecast model on Monday showed the U.S. economy growing at below an annualised 1 percent in the first quarter, down from 1.4 percent in the fourth quarter.

The disappointing outcome dimmed expectations for an imminent hike in U.S. interest rates, which some Federal Officials last week said could be as early as next month if the economy maintained its momentum.

The dollar index last stood at 95.960 , having slipped 0.2 percent on Monday. It lost ground against the euro, which was again flirting with $1.1200, off last week’s trough of $1.1144.

Sterling came within striking distance of $1.4300, pulling away from last week’s trough of $1.4056, while commodity currencies such as the Canadian and Australian dollars also rose.

The Aussie was last at $0.7543, following a 0.5 percent gain.

Whether the turn in U.S. dollar sentiment will persist depends on what Fed Chair Janet Yellen says at a speech to the Economic Club of New York. She is due to speak on the economic outlook and monetary policy at 1620 GMT on Tuesday.

“In the US, the biggest question remains the timing and magnitude of Fed rate hikes. In the last few days alone it feels like the case has swung from supporting the Fed’s most recent dovishness to opposing it and back to supporting it again,” analysts at ANZ wrote in a note to clients.

“It is a backdrop that is keeping many on their toes and makes maintaining conviction in views difficult. With Yellen speaking tonight and key data on the calendar for later in the week (ISM, payrolls), there’ll be plenty to ponder.

Trading will also pick up as Europe returns from the Easter long-weekend. (Reporting by Ian Chua; Editing by Eric Meijer)

Courtesy: Reuters

730-90 forexsignal.today

About the author

Forex News

Add Comment

Click here to post a comment

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

730-90 forex profita