The dollar fell to its 15-month low against the yen on Wednesday
Investing.com – The dollar fell to its 15-month low against the yen on Wednesday, as investors remained cautious ahead of the U.S. inflation data coming out later today.
The yen received some focus today as it gained strength against the dollar in morning trading Asia Wednesday amid the release of a growth, while many await the U.S. CPI index that might hint earlier interest rate hike.
Japan released Wednesday morning its GDP growth data for the fourth quarter of 2017 that failed to meet market expectations but still marked an eighth consecutive quarter of growth. In the three months to December, Japan’s economy grew 0.5% YoY and 0.1% on quarter, both below expectations of 0.9% and 0.1% growth. Despite failing to meet expectations, the data marks one of the longest growth streaks in recent years for Japan.
Japan chief cabinet secretary Yoshihide Suga’s speech at a news conference caught some attention as he warned excess volatility and disorderly currency moves could hurt economies, signalling concern over recent yen gains.
“Currency market stability is extremely important. The government will closely watch currency market moves with a sense of urgency,” said Suga.
The dollar weakened against the Japanese yen, with down 0.70% to 107.06 in mid-morning.
The that tracks the dollar against a basket of trade weighted currencies was down 0.11% to 89.60 at 10 pm EST – mid-morning in China.
The next focus for forex traders now is U.S. January consumer price index data expected at 8:30 am EST Wednesday, after the close of Asian markets. The CPI in January last year rose 1.7% compared to 1.8% December. High inflation numbers could signal faster than expected interest rate hikes from the US Federal Reserve and more downward pressure on the dollar.
Meanwhile in China, the People’s Bank of China (PBOC), set the fix rate for the yuan, the mid-point from which the currency is allowed to trade, at 6.3428 against dollar on Wednesday, almost flat from Tuesday’s 6.3247.
The PBOC also appointed JPMorgan as a yuan clearing bank.
The dollar was trading lower against the Chinese yuen at mid-morning, with down 0.02% to 6.3396.
The greenback continued to weaken against the Aussie dollar, with AUD/USD up 0.28% to 0.7880.
Australia’s Westpac consumer confidence index for February recorded a drop of 2.3% and traders will now be looking for cues from employment data due out Thursday.
The country’s economic growth has lagged in recent months and the reserve Bank of Australia (RBA) has yet to announce plans to boost interest rates but business confidence data earlier this week hit an all month high, according to a survey by National Australia Bank.
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