Dollar Steadies, Yen Drifts Lower After BOJ’s Ueda
The greenback traded mixed versus its Group-of-10 peers and in tight ranges while flows were rather muted as the week kicked off.
The Bloomberg Dollar Spot Index more than halves a 0.2% drop while 10-year US Treasury yields edge one basis point lower to 4.43%.
Chicago Fed President Austan Goolsbee gives welcome remarks at the Financial Markets Group Fall Conference later Monday.
USD/JPY rises as much as 0.5% to 155.14 after Bank of Japan Governor Kazuo Ueda said the timing of the central bank’s next policy adjustment will depend on the economy and prices.
Leveraged funds that shorted dollar-yen unwound the positions following the comments, according to Asia-based FX traders.
“Ueda’s comments are part of the smoking gun for yen weakness,” said Mingze Wu, a trader at StoneX Group. “Investors are reacting to the lack of hawkish views from the BOJ”.
One-week risk reversals trade at 100 basis points, puts over calls; year-to-date average stands at 122 basis points
EUR/USD +0.2% at 1.0564; spot flows run around 70% of recent averages, a Europe-based trader says.
One-month risk reversals briefly rallied to 75 basis points, puts over calls, the most since early July.
ECB’s Lagarde and Lane due to speak.
GBP/USD pares a 0.2% gain to trade at 1.2624; one-year implied volatility trades at 8.19%, stays near a one-year high hit last week; the gauge heads for its biggest monthly advance in two years.
Bank of England rate-setter Megan Greene speaks at an event titled “the future of inflation”.
AUD/USD little changed at 0.6461; Goldman Sachs lowered its forecast for Australia’s economic growth next year to 1.8% from 2% previously.
Source : Bloomberg
