The U.S. Dollar Index, used by investors worldwide to assess the greenback’s strength versus its rivals, fell and stayed close to a 3-week trough during Wednesday’s Asian trading session. Both the safe haven Japanese Yen and the common currency Euro were pushed higher as FX traders evaluated comments recently made by policymakers at the Bank of Japan as well as the European Central Bank. In the case of the BOJ, it appears that the bank’s ultra loose policy is being held in check for the time being with little likelihood of additional easing while at the ECB, officials there have also pointed out that there was no immediate need for stimulus measures.
As reported at 11:39 a.m. (JST) in Tokyo, the U.S. Dollar Index skidded 0.6% to trade at a session low of 79.762. DXY. The USD/JPY recorded a loss of more than 1%, the largest single day’s drop in more than 7 months, before recovering and edging higher to 101.91 Yen. Meanwhile, the EUR/USD climbed to a high of $1.3812, moving steadily away rom last Friday’s low of $1.3672.
Analysts Foresee Greenback Recovery
Emerging market currencies also saw some steady gains against the U.S. Dollar; FX players pointed out that the lack of solid economic data was a disappointment as was the Federal Reserve’s hesitancy to end tapering plans which would strengthen the greenback, thus they are selling off in a big way. Analysts, however, expect to see positive changes in data outcome over the next few weeks. The AUD/USD pair traded at a 5-month peak at $0.9368 after finally breaking through a key resistance level at $0.9310.