Dollar Slides Against Yen, Euro Weakness Continues and Other Top Forex News.
Falling U.S. bond yields caused the dollar to close the session at a one-week low against the yen on Wednesday, while the euro continues to weaken post ECB comments.
The dollar suffered as the yield on the U.S. 10-Year Treasury note eased back from one-month highs hit on Tuesday, ticking down to 2.62%.
While demand for the yen continues to be underpinned by diminished expectations for fresh monetary easing by the Bank of Japan.
USD/JPY closed the session down -0.34% to 102.01, the weakest level since June 2nd.
In europe, the single currency continues to come under pressure following last weeks implementation of monetary easing measures from the European Central Bank. The ECB cut all its main rates to record lows last Thursday and for the first time imposed negative deposit rates on commercial lenders in a move to stave off the risk of deflation in the euro zone.
EUR/USD closed the session down -0.12% to 1.3530, just ahead of last Thursdays four-month low of 1.3502.
Elsewhere, the pound found support against the dollar after official data on Wednesday showed that the U.K. unemployment rate fell to 6.6% in the three months to April, the lowest since early 2009.
The number of people receiving jobless benefits fell by 27,400, ahead of forecasts for a for a decline of 25,000 people. April’s figure was revised to a drop of 28,400 from 25,100.
The data added to the view that the Bank of England will raise interest rates ahead of other central banks as the economic recovery continues to gather momentum.
GBP/USD closed the session up 0.23% at 1.6796.
Down under, the Australian dollar extended a week-long rally, approaching its highest levels in a month on offshore yield-related buying.
AUD/USD closed the session 0.13% higher at 0.9385.
And the New Zealand dollar edged higher as investors were lured by the higher yield available in New Zealand, where the central bank is expected to hike interest rates tomorrow.
NZD/USD closed the session up 0.36% at 0.8558.
Finally, the Canadian dollar was boosted by rising oil prices following news that OPEC is to keep its output target of 30 million barrels a day unchanged, despite data showing a larger-than-expected weekly drop in overall crude stockpiles.
USD/CAD closed the session down -0.34% at 1.0866.
More coverage of today’s session.
- Marc Chandler: Sterling shines. – Strong U.K. employment data helped sterling bounce back after being dragged by the euro to five-day lows.
- Dean Popplewell: Is the EUR bear getting impatient? – With little new data to chew on the forex investor continues to wander in “no man’s land” of tight contained range trading. Capital markets have been expecting a much more aggressive breakout, especially with the EUR after the ECB decided to throw their whole tool kit at potential deflation and suspect growth in their region.
More Top Stories:
Cullen Roche: How much longer will the dollar remain the reserve currency of the world? – The U.S. Dollar’s status as a reserve currency seems to be a perennial concern for many people these days. I think this concern is often dramatically overstated. I was reminded of this point as I was reviewing the slides from Jeff Gundlach’s presentation yesterday which showed the following chart.
Vancouver Sun: Canadian dollar gains as oil prices climb, little else on economic calendar. – The Canadian dollar will be looking for some direction Wednesday, with no major economic data slated to be released. The loonie was ahead 0.13 of a cent to 91.84 cents US as commodities such as gold and oil continued to enjoy a bump in prices.
The Australian: Buoyant Australian dollar hits month high. – The Australian dollar extended a week-long rally today, approaching its highest levels in a month on offshore yield-related buying.
TVNZ: NZ dollar extends gains ahead of predicted rate hike. – The New Zealand dollar rose to a three-week high against the euro as investors were lured by the higher yield available in New Zealand, where the central bank is expected to hike interest rates tomorrow, while the European Central Bank last week cut rates.
Bloomberg: Gold set for longest rally since April on haven demand. – Gold futures headed for the longest rally in six weeks after the World Bank cut its forecast for global economic growth, boosting demand for the metal as a haven.