Dollar weakens in European FX session
2022.12.20 03:59
Dollar weakens in European FX session
Budrigannews.com – After the Bank of Japan surprised markets with a policy change, paving the way for the end of the country’s ultra-accommodative monetary policy, the U.S. dollar dropped and the Japanese yen rose.
The, which compares the dollar to a basket of six other currencies, was down 0.5% to 103.868 at 03:25 ET (08:25 GMT).
As was widely anticipated, it kept its benchmark rates close to zero, but it also increased the range of negative 0.5 percent to 0.5 percent for yield changes on its benchmark government bonds, from 0.25% to 0.25%.
following the unexpected move that was seen as a precursor to the BOJ eventually tightening policy, ending the last ultra-dovish stance in the developed world, as consumer surged to a 40-year high in November, fell 3.3% to 132.40, with the pair falling to a 4-month low.
After a sharp fall in the yen this year, largely caused by a widerning gap between local and, the Bank of Japan had to step in to support its currency in October.
The euro is still basking in the hawkish stance taken by the previous week and rose 0.1% to 1.0612.
Analysts at ING wrote in a note that “it was telling at last week’s ECB press conference that President Christine Lagarde was keen to highlight that the ECB would be tightening longer than the Fed.” “The ECB would clearly like a stronger euro to help out with its battle against inflation,” the note said.
All things considered, facilitated in November for the second month straight, adding to signs that high could be melting away in Europe’s biggest economy.
Compared to October, which saw a year-over-year increase of 34.5%, producer prices for industrial goods increased by 28.2% in November. However, they decreased by 3.9% in comparison to October.
traded largely unchanged at 1.2146 amid a wave of strikes by workers seeking pay raises to make up for near-40-year highs.
ING stated that “given that the Bank of England (BoE) is closer to ending its tightening cycle than the Fed and that the UK’s large current account deficit leaves sterling vulnerable in a global slowdown,” sterling could be the primary victim of any strength in the euro.
More Yen strengthened to 4-month highs on Asian FX
Even though the key lending rate remained at historic lows, the risk-sensitive fell 0.5 percent to 0.6666 and 0.1 percent to 6.9730.
