©Reuters. FILE PHOTO: US dollar and Chinese yuan banknotes are seen in this illustration photo taken on June 14, 2022. REUTERS/Florence Lo/Illustration/File Photo
By Karen Brettell
NEW YORK (Reuters) – The Japanese yen weakened against the dollar for a second straight day on Monday, giving back most of last week’s rally on expectations of less accommodative monetary policy, while investors awaited US inflation data and three major central bank meetings. .
Japan’s currency rose on Thursday after Bank of Japan (BOJ) Governor Kazuo Ueda, who met with Prime Minister Fumio Kishida on the same day, said the central bank had several options on which interest rates would target once they bring borrowing costs to would decrease in the short term. out of negative territory.
However, Bloomberg reported Monday that BOJ officials do not yet have enough evidence that wage growth is sufficient to justify ending ultra-loose monetary policy this month.
“This is the right response. Ueda’s words last week were not actually any concrete statement that they were going to end those negative rates,” said Helen Given, currency trader, at Monex USA in Washington.
The dollar rose to 146.58 yen and was last at 146.14 yen, up 0.85% on the day. The yen gave up almost all of its rally on Thursday, reaching 141.6 yen against the dollar.
The dollar rose 0.13% against a basket of currencies to 104.08.
The euro was unchanged on the day at $1.0762, close to Friday’s 24-day low of $1.0724. Sterling rose 0.06% to $1.2555 after hitting a 15-day low of $1.2504 on Friday.
Traders will look to U.S. consumer price inflation data on Tuesday for clues about the likely path of Federal Reserve policy. Headline inflation is expected to be unchanged in November, with an annual increase of 3.1%, up from 3.2% in October.
A New York Fed survey showed that U.S. consumers’ expectations for inflation in the coming year weakened to the lowest level in more than two years in November, while forecasts of higher gasoline and rental costs continued to decline. decrease further.
The dollar rose on Friday after job growth in November exceeded economists’ expectations, pushing expectations for the Fed’s first rate cut from March to May.
Central banks will then turn to markets, with Fed officials set to announce their updated economic and interest rate projections at the end of the U.S. central bank’s two-day meeting on Wednesday.
Fed Chairman Jerome Powell is also likely to temper expectations that rate cuts are likely in the first half of the year.
“His speeches, especially since the last cycle, have been that the remaining risk will be to the upside – so he is still in favor of more tightening rather than this easing that markets are starting to expect,” Seen said.
The European Central Bank and the Bank of England will also set the interest rate on Thursday.
Meanwhile, inflation fell to its lowest level in three weeks after data showed the country’s deflation worsened in November.
Data over the weekend showed Chinese consumer prices fell at the fastest pace in three years in November as factory deflation deepened. This points to rising deflationary pressures as weak domestic demand casts doubt on the country’s economic recovery.
The yuan hit three-week lows in both the onshore and offshore markets, with the latter at 7.1750 per dollar. The Australian dollar, often used as a liquid proxy for the yuan, fell 0.17% to $0.6566.
The dollar gained 0.39% against the Norwegian krone to 10.95, having previously reached 10.99, the highest level since November 14.
Analysts are divided over whether the Norwegian central bank will continue to raise interest rates this week. A narrow majority predict unchanged borrowing costs, a Reuters poll showed on Monday.
In cryptocurrencies, it plunged more than 7% to $40,542.
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Bid prices in currency at 3:00 PM (2000 GMT)
Description RIC Last US Close Pct Change YTD Pct High bid Low bid
Previous change
Session
Dollar index 104.0800 103.9600 +0.13% 0.570% +104.2600 +103.9200
Euro/Dollar $1.0762 $1.0761 +0.00% +0.43% +$1.0779 +$1.0742
Dollar/Yen 146.1400 144.9500 +0.85% +11.49% +146.5700 +144.8000
Euro/yen 157.28 156.02 +0.81% +12.10% +157.6800 +155.9200
Dollar/Swiss 0.8783 0.8801 -0.19% -5.00% +0.8816 +0.8779
Sterling/dollar $1.2555 $1.2548 +0.06% +3.82% +$1.2591 +$1.2534
Dollar/Canadian 1.3569 1.3587 -0.13% +0.15% +1.3604 +1.3550
Aussie/Dollar $0.6566 $0.6578 -0.17% -3.67% +$0.6583 +$0.6551
Euro/Swiss 0.9453 0.9467 -0.15% -4.47% +0.9487 +0.9446
Euro/British Pound 0.8570 0.8572 -0.02% -3.10% +0.8588 +0.8550
NZ $0.6126 $0.6121 +0.07% -3.53% +$0.6132 +$0.6105
Dollar/Dollar
Dollar/Norway 10.9500 10.9070 +0.39% +11.57% +10.9850 +10.9220
Euro/Norway 11.7847 11.7401 +0.38% +12.30% +11.8063 +11.7371
Dollar/Sweden 10.4914 10.4553 +0.28% +0.81% +10.5126 +10.4548
Euro/Sweden 11.2907 11.2592 +0.28% +1.27% +11.2972 +11.2547
