By: Barbara Zigah
With the continued pledge of the Federal Reserve Bank chairman, Ben Bernanke, that U.S. interest rates would remain at historic lows for the time being, the U.S. Dollar edged up in Thursday trading in Japan, as exporters from Japan and short-term investors sold off their higher-yielding currencies in a rally that is expected to be only of short duration. According to one bank trader in Japan, it was purely the Yen and Dollar carry trade crowd that bolstered the greenback, and over the long term, the U.S. Dollar is likely to remain under pressure.
As reported at 12:56 p.m. (JST) in Tokyo, the Dollar Index edged up to 75.865 .DXY, a .1% rise; yesterday it struck a new 1-week low of 75.60 .DXY. The Dollar Index has been on a downward trend over the past seven months, and only a few short weeks ago hit a new 14-month trough when it traded at 74.94 .DXY.
Investors appear to be cautious of aggressive U.S. Dollar selling, however, given that the Federal Reserve statement released yesterday which suggested a more confident tone regarding the recovering health of the U.S. economy. The release of U.S. jobs data tomorrow will be a better gauge for investors trying to determine the direction of U.S. interest rates through a change in Fed sentiment, but until that time, trading is expected to be somewhat subdued.
U.S. Dollar edges up on Fed Pledge
Barbara Zigah
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About Barbara Zigah
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.