With investors once again unsure if, or more precisely when, the Federal Reserve will hike interest rates, uncertainty has weighed broadly on the US Dollar which earlier struck a 2-week trough versus the Japanese Yen. The Yen was also being supported by the latest rhetoric from the Bank of Japan when one board member publicly noted his opposition to deepening the current negative interest rate environment. Despite the comments, analysts say that FX traders are still wary of a possible intervention by the Japanese central bank and that is keeping any support relatively short-lived.
As reported at 10:42 am (BST) in London, the USD/JPY pair was trading at 109.1000 Yen, down 0.37%; the pair has ranged from a low of 108.8350 Yen to a peak of 109.5805 Yen in today’s trading session. The EUR/JPY is down 0.24% to trade at 122.1900 Yen, off the session low of 121.9938 Yen and well off the peak of 122.5768 Yen.
Dollar Feeling Pressure as Labor Data Looms
The US Dollar Index is also now coming under pressure, after having started the week with support from Janet Yellen, the Federal Reserve chair, who hinted at an imminent rate increase. The Dollar Index is currently at 95.295 .DXY, down 0.16%; the Index is used by traders to assess the relative weight of the Dollar versus its major rivals. Markets are also on edge as they await the latest labor figures from the US which are due out tomorrow. Forecasters are predicting that non-farms payrolls figures will come in at 161,000 new jobs, just shy of last month’s actual reading and that the unemployment rate could fall to 4.9% from the current 5.0%. Any disappointment in the NFP figures will weigh on the prospects of a summer rate hike.