Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dollar Inches Down, Yen Edges Up as PM Contest Takes Shape

Published 08/30/2020, 10:19 PM
Updated 08/30/2020, 10:24 PM
© Reuters.

© Reuters.

By Gina Lee

Investing.com – The dollar inched down on Monday morning in Asia, giving up some earlier gains, with investors still digesting U.S. Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium the previous Thursday.

Powell's speech unveiled the Fed’s new approach to inflation, which has been interpreted to mean low rates for a longer period.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.09% to 92.293 by 10:09 AM ET (3:09 AM GMT).

Some investors remained bearish, with Societe Generale (OTC:SCGLY) strategists Kit Juckes and Olivier Korber saying in a note, “It seems clear to us that we are at the start of a multi-year period of dollar decline, from very elevated levels... our doubts, about whether the dollar can suffer a broad-based fall in the midst of risk aversion, global recession and particularly emerging market weakness, have been blown aside by the Fed.”

Meanwhile, investors will look to speeches from a few other Fed officials, with Vice Chairman Richard Clarida and Atlanta Fed President Raphael Bostic both due to speak later in the day, for more clues on the Fed’s new approach to inflation.

“This week could see continued dollar weakness as the market looks for hints on the new framework... month-end rebalancing could also bring weakness at the beginning of the week.” Barclays (LON:BARC) analysts warned in their own note.

The USD/JPY pair edged up 0.13% to 105.48. The yen saw gains after Sunday’s reports that Yoshihide Suga, Abe’s Chief Cabinet Secretary, intended to run for prime minister, after incumbent Shinzo Abe announced on Friday that he would be stepping down from the position due to poor health. If elected, Suga is widely expected to expand the fiscal and monetary stimulus programs rolled out under Abe.

The AUD/USD pair inched up 0.05% to 0.7369. The NZD/USD pair inched down 0.04% to 0.6740, with Auckland exiting lockdown on Monday after the government announced that the COVID-19 outbreak in the city is under control.

The USD/CNY pair edged down 0.12% to 6.8563. Earlier in the day, China released a manufacturing purchasing managers index (PMI) of 51 and a non-manufacturing PMI of 55.2 for August. Although the manufacturing PMI was slightly lower than the forecasted 51.2 prepared by Investing.com, the figures stayed above the 50-mark indicating expansion.

The GBP/USD pair inched down 0.04% to 1.3344.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.