The U.S. Dollar struck a 7-yearpeak versus the Japanese Yen during European trade and remained close to a 14-month high against the Pound Sterling as investors’ sentiment grows as they await the latest release of the minutes from the last Federal Reserve meeting which is likely to further reveal the divergence in policies among the Federal Reserve Bank and its major peers. Traders are hopeful that the Fed will take a more hawkish stance, given the recent improvement in the U.S. labor market, which will likely send the dollar higher.
As reported at 8:34 a.m. (GMT) in London, the USD/JPY was trading at a high of 117.44 Yen, a price unseen in more than seven years, before dropping back to 117.35 Yen, still a gain of 0.4% in the session. The EUR/JPY was also higher at 147.25 Yen, a near five-year peak. The Yen remains under pressure given that the Bank of Japan announced an unchanged policy earlier today, however it was reported that the upcoming sales tax increase would be delayed.
BoE Holds Rates in Check
The Bank of England earlier released the minutes of its most recent meeting, and in a 7-2 vote decided to maintain interest rates at their current low levels. The BoE said that it was maintaining rates given low inflation and global growth concerns; analysts believe that there was some worry that a divergence in policy between the BoE and the European Central Bank could prove risky. The GBP/USD was trading at $1.5615, a loss of 0.1% and close to a recently struck 14-month trough.