Yen drifts close its weakest against the Dollar

The yen on Tuesday floated close its weakest versus the dollar this year after optimism over Sino-U.S. trade discussions boosted investor’s appetite for riskier assets in the preceding session.

Yen and 100 dollar BankNote on white isolated.

Sterling spiked to its highest since January 31 on reports that British Minister Theresa May was considering postponing a deadline on the exit of the United Kingdom from the European Union.

The safe-haven Japanese yen was stable at 111.05 yen after tumbling as low as 111.24 yen in the preceding session, its lowest since December 27.

“The dollar has moved firmly into the 111-yen range,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities, adding that the greenback hovered just below its 200-day moving average against the Japanese currency.

“The yen isn’t likely to weaken further from its current level all of a sudden but it has clearly come down on a cross currency basis,” he said.

The dollar increased above 0.3 percent against the yen after U.S. President Donald Trump said he will postpone raising tariffs on Chinese goods on March 1, and that he would plan a summit assembly with Chinese President Xi Jinping at his Mar-a-Lago estate in Florida to conclude an agreement, assuming the trade talks make further progress.

Traders are eyeing a slate of data in the second half of the week for fresh signals on the health of the worldwide economy, including industrial activity figures from China and the United States and revised U.S. fourth quarter gross domestic product figures.

Investors are also seeking fresh signals on the Federal Reserve’s most recent view on the economy and monetary policy. Fed Chairman Jerome Powell will testify before the Senate Banking Committee later on Tuesday, in the first of a two-day appearance before legislators.

Powell and other Fed legislators have indicated they favor patience before raising important loaning rates again because of current signs of slowing financial development. The futures market implicit traders wager the central bank would not increase interest rates at all in 2019.

Sterling soared to its highest versus the dollar in close to four weeks on reports that British Prime Minister Theresa May was considering postponing a deadline on Brexit.

May is expected allow her cabinet to discuss extending the deadline beyond March 29 at a meeting on Tuesday.

A news agency reported she will propose formally ruling out a “no-deal” Brexit situation which could potentially lead to the postponing of UK’s exit from the European Union by months.

The British pound was last up more than 0.2 percent at $1.3129, giving up some gains after hitting as high as $1.3149, its highest since January 31.

“It seems that May is adjusting to the reality surrounding the Brexit schedule as it was known for long that meeting the March 29 deadline was going to be hard,” said Daiwa’s Ishizuki.

“The pound is rising steadily, and might gain further,” he added.

The dollar index against a basket of six major currencies was basically flat at 96.388.

The euro was a shade higher at $1.1362 after advancing 0.2 percent.

Get the latest and hottest news from different financial markets and economies now on HQBroker News! Join the community at HQBroker!

Categories: Forex

Tags: , , , , , , ,

Leave a Reply

%d bloggers like this: