This slowdown followed a 4.8% advance so far this year, driven by declining expectations of an imminent rate cut in the United States.
The news that China is considering a rescue package for its troubled stock markets positively impacts the yuan and the dollar Australian, the latter considered a more liquid substitute for exposure to the Asian giant. In that context, the dollar fell 0.3% against the “offshore” yuan, standing at 7.1722 units, while the Australian dollar advances by more than 0.5%, finally improving by 0.2% and standing at 0.6583 dollars.
The yen rebounded on Tuesday after the Bank of Japan maintained its ultra-loose monetary policy, although markets picked up signs that the end of its negative interest rate policy is near.
In response, the US dollar fell around 0.2% against the yen, settling at 147.81 units. This slowdown followed an advance of 4.8% so far this year, driven by declining expectations of an imminent US rate cut.
Bank of Japan and yen sensitivity
The yen’s sensitivity to the rate difference between Japan and other markets played a crucial role in this trend.
Kazuo Ueda, governor of the Bank of Japan, did not provide indications on whether the entity will take rates out of negative territory at the next meetings in March or April, as many economists anticipate. However, noted that the probability of Japan sustainably achieving the 2% inflation target is gradually increasing.
Meanwhile, the euro held steady at $1.0882, and European investors examined a survey of euro zone banks for evidence of the extent to which tightening monetary policy has trickled down to the economy.
As European Central Bank meeting approaches on Thursday, though no rate changes expectedinvestors will be attentive to the prospects that arise. Currently, market prices suggest a reasonable probability of a rate cut in April.
On other fronts, the pound sterling recorded improvements of 0.07%, reaching $1.2721, while the dollar index remained stable at 103.3 units.
Source: Ambito
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