The yen remains near 34-year lows, despite Japanese authorities stepping up their intervention warnings.
The global dollar recovers this Wednesday part of the ground lost against the euro and the pound sterling due to the strong falls of the day before, while the yen stays close to minimum of 34 years, despite the fact that the Japanese authorities intensified their warnings of intervention.
On Tuesday, the dollar index -which measures the performance of the greenback against six major currencies, including the euro, the pound sterling and the yen– fell 0.4%, weighed down by surprising European activity data and cooling US business growth. But, this Wednesday, it rises 0.2%, to 105.85, after previously touching its lowest level since April 12, which was 105.59.
The euro, meanwhile, fell 0.2% to $1.0684following Tuesday’s 0.4% rebound after data showed business activity in the euro zone expanded at its fastest pace in almost a year, mainly due to the recovery in services.
The sterling also benefits data showing British businesses posted the biggest business growth in almost a year, while Bank of England chief economist Huw Pill said interest rate cuts are still some way off. The pound lost 0.1% to $1.2437, after rising 0.8% in the previous session.
Data in the world
On the contrary, the US business activity cooled in April to a four-month low due to weaker demand, while inflation rates fell slightly.
He Friday the PCE deflator will be published, the Federal Reserve’s preferred measure of consumer inflation. According to CME’s FedWatch tool, the probability of a first rate cut in September is 67%.
The FED, with an uncertain path
He dollar index reached a 5 1/2-month high of 106.51 last week, as the persistent inflation forced the authorities of the Federal Reserve (FED) not to rush to relax monetary policy.
The dollar rebounded and marks a new 34-year high against the Japanese currency at 154.98 yen.
On Tuesday, the Japanese Finance Minister Shunichi Suzuki issued the strongest warning yet about the possibility of intervention, saying that last week’s meeting with his counterparts from the United States and South Korea had laid the groundwork for Tokyo to act against excessive movements in the yen.
Source: Ambito
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