The US Dollar held close to a 2-week peak versus its key rivals as worries grow over the news that the Chinese economy has slowed to a 28-year low. That news pushed FX traders toward safe haven currencies, with the Japanese Yen being the prime beneficiary of investor sentiment. In support of those concerns, the International Monetary Fund yesterday lowered its global growth forecasts for this year and the next, specifically citing the growth slowdown in China as well as the Eurozone. They further commented that the resolution to the trade tensions was vital in order to prevent further destabilization of the global economies.
As reported at 10:56 am (JST) in Tokyo, the USD/JPY was trading at 109.518 Yen, a loss of 0.0949%; the pair is moving off the session trough of 109.498 Yen. The EUR/JPY is lower at 124.513 Yen, down 0.10%; the pair has ranged from 124.500 Yen to 124.7410 Yen. The GBP/JPY is also lower at 141.178 Yen, down 0.10%, and just a few pips off the earlier low of 141.167 Yen.
Dollar Outlook Uncertain
The slowdown in China and the impact on global growth has led to speculation that the Federal Reserve Bank might also call a halt to its tightening cycle. One currency strategist in Tokyo said that that is likely to result in a softer US Dollar which, as of now, is over-valued based on the fundamentals.