Dollar Steady, Yen Remains in Intervention Zone
The US dollar moved nearly flat on Monday (July 6th) after previously recording its worst daily decline since late April. Market players' primary focus remains on the direction of the Federal Reserve's monetary policy.
At 4:02 PM ET (8:02 PM GMT), the US dollar index was slightly above the flatline at 100.85. Previously, the dollar index had fallen 0.5% on Thursday after the release of weaker-than-expected US Nonfarm Payrolls data for June.
The employment data is seen as giving the Fed room to delay raising interest rates. The market views US employment conditions as still quite strong, but not overheated. Under normal conditions, high interest rate expectations typically support a stronger dollar.
The Fed, under new Chairman Kevin Warsh, previously signaled it would abandon forward guidance and focus more on inflation data. Warsh reiterated this stance in his comments in Portugal last week. Investors are now awaiting the Fed's June meeting minutes, due to be released Wednesday, for insights into the central bank's outlook, especially as half of policymakers still leave open the possibility of an interest rate hike this year.
In Europe, the euro strengthened slightly to around US$1.1441 following the release of eurozone industrial producer prices and retail sales data. Industrial producer prices rose 0.2% month-on-month in May, slowing from 0.7% in April. However, year-on-year, prices rose 5.9%, primarily due to a 14% surge in energy prices. Meanwhile, eurozone retail sales rose 0.2% in May, improving from a 0.3% decline the previous month.
Meanwhile, the Japanese yen remains under pressure. USD/JPY rose 0.4% to around 162.04, keeping the yen near a 40-year low. Levels above 160 have often triggered intervention from Japanese authorities, so markets remain wary of potential new moves from Tokyo. Although the Bank of Japan raised interest rates in June and signaled a more hawkish stance, the yen's weakening continued. (arl)
Source: Newsmaker.id
