The yen jumped on Thursday as traders pulled back from dollar bets. Central banks hold meetings next week, and hawkish holds are expected on rates. The euro, meanwhile, has held fairly steady above $1.12.
The yen jumped on Thursday as the latest beneficiary of a pullback in bets on the dollar. The move comes ahead of a slew of central bank meetings next week, where hawkish holds are expected on rates.
Yen breaks through its 50-day average
After spending October in a tight range, the currency rose through its 50-day moving average to 157.3 per dollar in the Asia session. Sterling and currencies in Canada, Australia and New Zealand had recent gains.
Nick Twidale, chief market strategist at ATFX Global in Sydney, put the move down to positioning. According to the Reuters report: "I think it’s some longs getting out of positions because (dollar/yen) is not moving higher."
The currency market has been long the dollar on the assumption that the AI boom keeps the US economy humming. Recent wobbles in AI-related debts and stocks have knocked that confidence a little and wobbled the dollar.
Other majors steady against the dollar
Elsewhere the dollar's downdraft stabilised. The Canadian dollar inched up to a one-month top of C$1.4031 per dollar, helped by expectations that the Bank of Canada will hike next week, against an expected hold by the US Federal Reserve.
Sterling held at $1.3403 after a one-month high of $1.3409 earlier in the week, supported by hotter-than-expected British inflation. The Australian dollar was hanging on at $0.7015, and expectations for a rate hike next week in New Zealand helped the kiwi to a one-month high of $0.5709, before it dropped back to $0.5698.
Euro finds a floor, central banks hold
The euro seems to have found a floor, for now. It has kept fairly steady above $1.12 after a month on the slide, as fiscal concerns in France and Europe's energy fragility attracted short sellers.
The European Central Bank is expected to hold its benchmark rate at 2.5%, and markets have priced a hold in Tokyo, with the next hike, to 1.5%, expected early next year. The Federal Reserve is seen on hold in October, with the Fed funds rate window at 3.75-4%, but hiking in December.
Source: Investing.com
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