Breaking News
0

Dollar near three-week high as central banks eyed

ForexJan 23, 2019 04:03AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. U.S. dollar notes are seen in this picture illustration

By Saikat Chatterjee

LONDON (Reuters) - The dollar held near a three-week high on Wednesday after the Bank of Japan left monetary policy unchanged, boosting risk appetite and sending the yen lower.

With Tokyo sounding a cautious note on the outlook for global growth, attention shifted to the European Central Bank, which meets on Thursday. Markets expect it to acknowledge growing threats to the euro zone economy.

The caution from senior policymakers comes as economic data from China to Europe shown signs of a slowdown. Traders reacted by unwinding some of their bearish dollar bets, especially against the euro.

"The ECB will likely join its global peers in striking a cautious view on growth and that should keep the dollar supported, especially with bearish expectations on the greenback such a consensus trade," said Lee Hardman, a currency analyst at MUFG in London.

Against a basket of other currencies (DXY), the dollar was trading at 96.32, near the 96.484 hit in the previous session.

As expected, the Bank of Japan kept monetary policy unchanged. But it lowered its inflation forecast, as a larger-than-expected drop in December exports underlined the need for support for the trade-reliant economy.

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. Failure to resolve trade tensions could further destabilize the global economy, the IMF said.

The euro (EUR=EBS) was steady at $1.1367. Sterling edged up to $1.2961 after gaining 0.5 percent in the previous session.

British Prime Minister Theresa May’s proposed agreement on terms for leaving the European Union was rejected by parliament last week in the biggest defeat in modern British history. Since then, lawmakers have been trying to resolve the crisis. 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.

Dollar near three-week high as central banks eyed
 

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email