Last week’s data release from the U.S. showed an improvement in new jobs created and a lowering of the unemployment rate, but the news that wage growth slipped has forced investors to reevaluate the Federal Reserve’s likely intent regarding interest rates, and cast fresh doubts on the likelihood of a rate increase later in the year. In light trading as a result of closed Japanese markets, the greenback had been pushed lower earlier, but has since managed to recoup earlier losses,
As reported at 9:13 a.m. (GMT) in London, the EUR/USD was trading lower at $1.1804, at the lower end of today’s trading range of $1.1789 and $1.1873. The USD/JPY was earlier trading at a 1-week trough at 118.12 Yen but is now about 0.15% higher, trading at 118.69 Yen.
ECB Cautioned
In the Eurozone, a warning from the Italian central bank could put some pressure on the European Central Bank; he cautioned that Eurozone deflationary risk shouldn’t be underestimated and suggested that the best option for the ECB was the purchase of government bonds which is likely to be under consideration at the January 22nd policy meeting. Analysts believe that Mario Draghi and the ECB’s decision makers will be compelled to massively ease in order to restore some growth to the Eurozone.