Hope that the US and Chinese governments are able to work out mutually beneficial trade terms had earlier helped to support the greenback against safe haven assets. Also benefiting from improved sentiment are some higher risk assets. Analysts have suggested that market players exercise caution, however, as the preliminary terms are far from being signed off on. On Thursday, spokespersons from both sides said that tariffs are likely to be rolled back in the initial phase if the deal is completed.
The USD/JPY was trading lower at 11:42 am in Tokyo, a loss of 0.1070%; the pair earlier hit a high of 109.412 Yen, while the low is at 109.146 Yen. The AUD/JPY was trading at 75.137 Yen, down 0.2686%, while the NZD/JPY was at 69.538 Yen, up 0.0086%.
BoE Surprise Sends Sterling Lower
In the UK, the Bank of England took FX traders by surprise on Thursday when two members of the Monetary Policy Committee voted to lower its benchmark rate. Though seven members had voted to maintain the status quo, the split decision was unexpected. Analysts had said that they expected all members of the MPC to be unanimous in holding off until there was more clarity from the Brexit and the upcoming Parliamentary election. However, it was that uncertainty which led the two members to cast their vote for a rate cut. The BoE Governor and the other MPC members did say that they would be watching the outcomes very closely with a view to backing the minority members, if it seemed a rate cut was warranted. The GBP/USD was trading at $1.2815, up 0.0234%; the pair had earlier hit a 2-week trough at $1.28066, after Thursday's decision was announced.