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Dollar holds steady vs euro; yen climbs

Dollar holds steady vs euro; yen climbs

NEW YORK: The dollar held steady against the euro Monday in a market focused on the Federal Reserve’s interest-rate plans, while the yen gained after the G7 warned Japan against currency intervention.

Extending the Fed’s hawkish signals last week that a June US rate rise could be in the cards, James Bullard, president of the St. Louis Fed and a voting member of the policy-setting Federal Open Market Committee, warned that markets could be behind the curve on the Fed’s intentions.

Since raising rates in December for the first time in nine years, the Fed in March forecasted essentially two rate rises for this year, but markets have had much lower expectations amid a batch of weaker US economic data.

However, said Bullard in a speech in Beijing, “US evidence from labor markets, actual inflation readings and global influences suggests the FOMC median projection may be more nearly correct.”

The dollar edged a tick lower to $1.1219 per euro around 2100 GMT from $1.1220 at the same time Friday.

Omer Esiner at Commonwealth Foreign Exchange said the market now currently sees a nearly 30 percent chance of a US rate hike at the June 14-15 FOMC meeting, whereas two weeks ago the odds were almost zero.

The yen rose 0.8 percent against both the greenback and the euro after the finance chiefs of the Group of Seven rich nations warned member Japan over the weekend not to weaken its currency, reminding Tokyo of previous commitments not to intervene in forex markets.

“The yen also caught a counterintuitive boost from disheartening Japanese trade data that showed big declines in imports and exports, worrisome signs for global growth that stoked demand for safe havens,” said Joe Manimbo of Western Union Business Solutions.

2100 GMT Monday Friday

EUR/USD 1.1219 1.1220

EUR/JPY 122.56 123.59

EUR/CHF 1.1101 1.1118

EUR/GBP 0.7749 0.7738

USD/JPY 109.25 110.15

USD/CHF 0.9895 0.9909

GBP/USD 1.4480 1.4499

Copyright AFP (Agence France-Presse), 2016

Courtesy : BRecorder



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