Breaking News

Forex - U.S. Dollar Steady, Yen Weakens as Risk Appetite Improves

ForexJan 23, 2019 03:13AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. - The U.S. dollar was holding steady against a basket of its rivals on Wednesday and the yen was broadly lower as risk sentiment improved, but concerns over slowing global growth and U.S.-China trade tensions looked likely to keep gains in riskier assets in check.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 95.97 by 03:10 AM ET (08:10 AM GMT), little changed for the day.

The yen was weaker against the greenback, with USD/JPY advancing 0.26% to 109.64. It was also lower against the euro, with EUR/JPY climbing 0.32% to 124.61.

Overnight, the Bank of Japan kept monetary policy unchanged and trimmed its inflation forecast. Data showing a larger-than-expected drop in December exports earlier in the day underlined the need for continued support for the trade-reliant economy.

The Australian dollar was slightly higher, with AUD/USD rising 0.18% to 0.7135.

The New Zealand dollar was also higher, with NZD/USD gaining 0.5% to trade at 0.6780 after overnight data showing that inflation edged higher in the fourth quarter was seen as reducing the likelihood of interest rate cuts.

Currency markets have been whipsawed over recent weeks amid concerns over a range of issues from Brexit to slowing global growth and the outlook for major central banks.

"Nervousness around global growth and trade tensions is certainly a factor driving the markets right now," said Michael McCarthy, chief markets strategist at CMC Markets.

"Markets have also seen a spectacular run since late the recent correction in equities can also be due to positioning."

On Monday, the International Monetary Fund cut its 2019 and 2020 global growth forecasts, citing a bigger-than-expected slowdown in China and the euro zone, and said failure to resolve trade tensions could further destabilize a slowing global economy.

Growth in China last year was the slowest since 1990 and is set to weaken further this year before stimulus measures start to kick in.

Investors are hoping for a breakthrough in U.S.-China trade talks, with the trade war between the world's two largest economies spooking markets.

A report by the Financial Times that the U.S. had rejected China's offer for preparatory trade talks dampened risk sentiment overnight, though it was later denied by a White House adviser.

The euro and the pound were both flat against the U.S. currency, with EUR/USD at 1.1356 and GBP/USD changing hands at 1.2962.

Sterling gained 0.5% against the greenback on Tuesday after data showing that the U.K. labor market remained strong despite an economic slowdown ahead of the looming deadline for Brexit on March 29.

Sterling is sitting close to its highs last seen in mid-November, a sign that traders expect Britain to avoid a chaotic exit from the European Union.

Since Prime Minister Theresa May’s divorce deal with the EU was rejected by lawmakers last week in the biggest defeat in modern British history, lawmakers have been trying to plot a course out of the crisis, yet no option has the majority support of parliament.

"The market is now completely discounting the prospect of a hard Brexit, though the political risk still remains in play and volatility is sure to ratchet higher if no clear path is visible to the market," said Kathy Lien, managing director of currency strategy at BK Asset Management,

-- Reuters contributed to this report.

Forex - U.S. Dollar Steady, Yen Weakens as Risk Appetite Improves

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email