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[1/2] Chinese Yuan and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. That represented the highest annual growth rate since comparable records began in 2001. "BoE Sep rate hike bets have jumped ... providing support for the GBP," said Scotiabank chief FX strategist Shaun Osborne. The yuan briefly bounced back as major state-owned banks were seen selling dollars to support the local currency. Punctuating those worries, Chinese data on industrial output, retail sales and investment released shortly after the PBOC's rate cut showed unexpected slowdowns.
Persons: Yuan, Dado Ruvic, Sterling, BoE, Shaun Osborne, Scotiabank's Osborne, Osborne, Shinichiro Kadota, Shunichi Suzuki, Joice Alves, Samuel Indyk, Brigid Riley, Kevin Buckland, Susan Fenton Organizations: REUTERS, Bank of, Kremlin, Bank of England, Scotiabank, People's Bank of China, U.S, Traders, Barclays, Finance, Thomson Locations: Russian
But a key factor behind the yen's weakness is unchanged, namely the yawning yield gap with the United States. Yet currency traders remain nervous about provoking intervention, as the yen entered the same zone that triggered heavy dollar selling by Japanese authorities in September and October of last year. For now, traders are testing the waters by selling the yen against sterling and the Swiss franc, mindful that selling against the dollar could gather momentum quickly. From a purely macroeconomic perspective, Kichikawa said, officials have no imperative to prevent yen weakness before 150, which is consistent with the mild inflationary pressure that the BOJ aims to foster. The bond market, which precipitated the yen's slide, may ultimately give Japan's authorities reason to hold off on pressing the intervention button.
Persons: Shunichi Suzuki, Suzuki, Aaron Hurd, Masayuki Kichikawa, Brent, Kichikawa, Shinichiro Kadota, Kevin Buckland, Saqib Iqbal Ahmed, Simon Cameron, Moore Organizations: Bank of Japan, Finance, State Street Global Advisors, Swiss, Brent, Sumitomo Mitsui DS Asset Management, Treasury, Barclays, Thomson Locations: TOKYO, United States, Tokyo, Boston, Japan
The Australian dollar surged after an increase in the minimum wage stoked bets for the central bank to raise rates again next week. A day earlier, Fed Governor Philip Jefferson had said that "skipping a rate hike at a coming meeting would allow the committee to see more data before making decisions about the extent of additional policy firming." "Maybe they hike in June, maybe in July, or maybe they don't hike any more." Money markets currently see about 29% odds of a hike, down from near 70% earlier in the week. Traders currently lay about one-third odds on a quarter-point rate hike on Tuesday.
Persons: Patrick Harker, Philip Jefferson, Shinichiro Kadota, Christine Lagarde, Joe Biden, Monday's, Ray Attrill, NAB's, Kevin Buckland, Sam Holmes Organizations: U.S, Federal Reserve, Australian, Philadelphia Fed, Barclay, European Central Bank, National Australia Bank, Traders, Thomson Locations: TOKYO, U.S, Tokyo
The U.S. currency fell 0.26% to trade at 134.025 yen in the Asian morning, and earlier dipped as low as 133.895. The dollar index - which measures the greenback against a basket of six major peers, including the yen - edged 0.05% lower to 101.36. "That'll weigh on dollar-yen," with the pair potentially weakening to as low as 130 in the near term, Kadota said. Elsewhere, the Aussie dollar rose 0.08% to $0.6784, pushing back toward Wednesday's 2-1/2-month high of $0.6818. New Zealand's kiwi dollar added 0.09% to $0.63735, after touching a nearly three-month high of $0.6384.
The yen slipped with the government set to nominate a candidate who backs the current policy settings as the new Bank of Japan governor on Tuesday. The risk-sensitive Australian and New Zealand dollars eased with Asian equities on worries that higher U.S. rates will choke growth. Ahead of Tuesday's CPI report, revisions to the previous data set showed consumer prices rose in December instead of falling as previously estimated. Separately, the University of Michigan surveys showed a one-year inflation outlook of 4.2%, higher than the final number in January. The U.S. currency gained 0.18% to 131.63 yen , although well within the range of the past week of 129.80 to 132.90.
REUTERS/Dado Ruvic/Illustration/File PhotoNEW YORK, Jan 27 (Reuters) - The dollar clung to modest gains against the euro on Friday after data showed falling U.S. consumer spending and cooling inflation, and as investors awaited a slew of central bank meetings next week. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, dropped 0.2% last month, the Commerce Department said on Friday. Data for November was revised lower to show spending slipping 0.1% instead of gaining 0.1% as previously reported. Data showed consumer price inflation in Japan's capital accelerated to a nearly 42-year peak this month, piling pressure on the BOJ to step away from stimulus. Attention now turns to a slew of central bank policy decisions, with the Fed, European Central Bank and Bank of England (BoE) all due to make rate decisions next week as they judge what policy adjustments may be required in their battle with rampant inflation against a tough global economic backdrop.
REUTERS/Dado Ruvic/Illustration/File PhotoLONDON, Jan 27 (Reuters) - The dollar edged up on Friday to pull away from multi-month lows against the euro and sterling, as investors began to train their sights on a slew of major central bank meetings next week. The U.S. Federal Reserve, European Central Bank and Bank of England are all due to make rate decisions next week as they judge what policy adjustments may be required in their battle with rampant inflation against a tough global economic backdrop. The euro was last down 0.1% versus the dollar at $1.08760 , while sterling was down 0.4% at $1.23670 . The yen, meanwhile, rose against the dollar as heated Tokyo inflation readings spurred bets that a hawkish pivot from the Bank of Japan (BOJ) could be in the offing. The bank will make its next policy decision on Thursday, and is seen increasing by a half point.
The dollar also sagged close to a nine-month low versus the euro, amid market expectations the European Central Bank next week will implement a rate hike twice as big as the Federal Reserve's. However, that was still well away from the 7-1/2-month trough of 127.215 reached last week as expectation built then for the central bank to tweak policy. When BOJ officials voted unanimously on Jan. 18 to keep stimulus settings unchanged, the currency pair bounced as high as 131.58. "If there are any bouts of yen weakness, I think the topside will continue to be capped by those expectations," Kadota said. For the week, the dollar is about flat against the yen, after swinging between gains and losses.
Barclays shares its forecast for the Japanese yen
  + stars: | 2023-01-20 | by ( ) www.cnbc.com   time to read: 1 min
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBarclays shares its forecast for the Japanese yenShinichiro Kadota of the bank discusses the outlook for the Japanese yen, taking into account developments such as more possible changes to the Bank of Japan's yield curve control policy and a new central bank governor.
Dollar tests 32-year peak to yen; Aussie, kiwi rise on rate bets
  + stars: | 2022-10-18 | by ( ) www.cnbc.com   time to read: +4 min
The New Zealand dollar surged after a hotter-than-expected consumer price report boosted expectations for further policy tightening. The U.S. currency bought 148.855 yen after pushing to 149.10 late in the overnight session for the first time since August 1990. Absent the intervention by Tokyo, Kadota said the dollar should already be above 150 yen based on interest-rate differentials and other market factors. A red-hot U.S. consumer inflation report last week boosted bets for even more aggressive U.S. policy tightening, with markets currently priced for 75 basis point hikes in November and December. New Zealand's kiwi jumped 0.57% to $0.567 after a report showed consumer inflation continued to hover near three-decade highs in the third quarter.
Japanese yen and U.S. dollar banknotes are arranged for a photograph in Tokyo, Japan. The U.S. dollar pushed to a fresh two-decade high versus major peers on Thursday, propelled by the Federal Reserve's hawkish outlook for interest rates. The U.S. dollar pushed to a fresh two-decade high versus major peers on Thursday, propelled by the Federal Reserve's hawkish outlook for interest rates and after Russian President Vladimir ordered the country's first mobilization since World War Two. The greenback climbed to a new 24-year high above 145 yen after the Bank of Japan maintained ultra-low interest rates and dovish policy guidance on Thursday. The two-year U.S. Treasury yield reached a fresh 15-year high of 4.132% in Tokyo trading.
Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. The dollar index , which measures the currency against a basket of six counterparts including the euro and sterling, rose as high as 111.65 for the first time since June 2002. read moreThe two-year U.S. Treasury yield reached a fresh 15-year high of 4.132% in Tokyo trading. The dollar rose 0.23% to 144.44 yen , edging back toward the psychological 145 mark where it was rebuffed two times this month. Register now for FREE unlimited access to Reuters.com RegisterReporting by Kevin Buckland; Editing by Edwina GibbsOur Standards: The Thomson Reuters Trust Principles.
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