Forex – Dollar, Yen Rise as Risk Appetite Makes Cautious Return

© Reuters. The dollar and the Japanese yen rose on Friday – The dollar and the Japanese yen rose on Friday as U.S. stocks rebounded to positive territory, although Asian equities remained in the red.

The that tracks the greenback against other currencies rose 0.2% to 96.41by 1:05 AM ET (05:45 GMT). The index hit a two-month high on Thursday.

However, risk sentiment seemed to have turned sour on Friday as Asian stocks and U.S. stock futures both traded lower.

“The risk sentiment is still quite fragile. Overnight, we had Amazon (NASDAQ:) and Alphabet (NASDAQ:) declare results which were not that cheerful. I expect the yen to re-test its recent highs,” said Sim Moh Siong, currency strategist at Bank of Singapore.

Amazon’s shares were 6% lower in after-market trading as its sales and operating income fell short of estimates. Meanwhile, Google parent Alphabet said its third-quarter revenue also missed forecasts.

Meanwhile the yen also gained as the pair traded 0.2% lower to 112.19.

The pair was up 0.2% to 6.9623 as the People’s Bank of China set the yuan reference rate at 6.9510 vs the previous day’s fix of 6.9409. The weaker yuan also dragged the dollar lower, as it was seen as the proxy for the Chinese economy.

Looking ahead, markets are likely to focus on the upcoming U.S. third-quarter GDP data due later in the day.

“Markets will be watching this number carefully as it could give signs if we are close to peak earnings for U.S. corporates. Housing data and consumer goods durables data has been soft lately,” said Bank of Singapore’s Sim.

The Fed is expected to raise rates by 25 basis points in December.

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