Asian Session – Dollar gains against yen as Wall Street Journal Article says Fed will taper next week
January 21, 2014 8:05 am
The dollar rose against the yen but was relatively stable versus the euro during today’s Asian trading. The dollar gained 0.36% against the Japanese currency, climbing to 104.54, as strength in risk assets such as the Nikkei also hurt the yen.
The euro was little changed against the dollar at 1.3549, with most of the action in this week’s sessions occurring around the 1.3550 level following the 2-month low of 1.3507 the previous day.
The market is carefully watching developments in the euro money markets as overnight money rates continued to climb close to 0.36%. There is speculation that this may force the ECB to take action in order to bring down the cost of short-term money.
The euro was also stronger against the yen, rising by 0.33% to 141.62.
An article from the online edition of the Wall Street Journal, by a journalist who is believed to have sources within the Federal Reserve, said that the US central bank was contemplating an additional cut of 10 billion dollars to its asset purchase program. That would lower the amount of monthly purchases to 65 billion.
Despite news of the rising possibility of further tapering, risk sentiment was helped by the injection of liquidity by the People’s Bank of China (PBOC), which in turn helped to ease the cash crunch that was evident in China. Chinese stocks also rose.
This positive development in China in turn helped the Australian dollar extend its rebound from a 3 ½ year low yesterday by rising 0.15% against the US dollar to 0.8822.
Further ahead during the European Session, the German Zew investor sentiment survey will be released at 1000 GMT, while the UK CBI trends survey will come out at 1100 GMT. Despite the fact that the US is today returning from yesterday’s Martin Luther King Jr. holiday, no economic data is on tap later today.
The dollar rose against the yen but was relatively stable versus the euro during today’s Asian trading. The dollar gained 0.36% against the Japanese currency, climbing to 104.54, as strength in risk assets such as the Nikkei also hurt the yen.
The euro was little changed against the dollar at 1.3549, with most of the action in this week’s sessions occurring around the 1.3550 level following the 2-month low of 1.3507 the previous day.
The market is carefully watching developments in the euro money markets as overnight money rates continued to climb close to 0.36%. There is speculation that this may force the ECB to take action in order to bring down the cost of short-term money.
The euro was also stronger against the yen, rising by 0.33% to 141.62.
An article from the online edition of the Wall Street Journal, by a journalist who is believed to have sources within the Federal Reserve, said that the US central bank was contemplating an additional cut of 10 billion dollars to its asset purchase program. That would lower the amount of monthly purchases to 65 billion.
Despite news of the rising possibility of further tapering, risk sentiment was helped by the injection of liquidity by the People’s Bank of China (PBOC), which in turn helped to ease the cash crunch that was evident in China. Chinese stocks also rose.
This positive development in China in turn helped the Australian dollar extend its rebound from a 3 ½ year low yesterday by rising 0.15% against the US dollar to 0.8822.
Further ahead during the European Session, the German Zew investor sentiment survey will be released at 1000 GMT, while the UK CBI trends survey will come out at 1100 GMT. Despite the fact that the US is today returning from yesterday’s Martin Luther King Jr. holiday, no economic data is on tap later today.
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