Dollar Pares Gains After Waller Remarks; Yen Rises
A Bloomberg gauge of the dollar pared gains as Treasury yields fell after Fedspeak supportive of interest-rate cuts and a mixed US retail sales report. The yen headed for its best two-day run since November following a Bloomberg report that Bank of Japan officials see a good chance of a rate hike next week.
The Bloomberg Dollar Spot Index up less than 0.1% following a 0.2% drop Wednesday after CPI report.
Fed Governor Christopher Waller said officials could lower interest rates in the first half of 2025 should inflation data continue to be favorable, also flagging possibility of a move in March.
Treasury yields fall across curve after Waller remarks and tracking gilts; 10-year yield down 3.9bp to 4.62%.
Earlier, retail sales MoM rose 0.4% in December versus 0.6% expected; control group rose 0.7% versus 0.4% forecast.
Focus on confirmation hearing of Treasury Secretary nominee Scott Bessent and any remarks on dollar, tariffs .
USD/JPY down 0.7% to 155.43 and lowest since Dec. 19 intraday.
BOJ policymakers acknowledge the likelihood of a rate hike this month, provided incoming Trump administration doesn’t rattle markets.
Money markets now price an 84% chance the BOJ tightens policy by a quarter point at end of meeting on Jan. 24.
Offshore leveraged accounts faded the yen’s move through 155.50, a Europe-based trader says.
GBP/USD steady at 1.2243 after data showed Britain’s economy narrowly returned to growth in November but fell short of expectations.
EUR/USD little changed at 1.0291.
Inflation in the euro area is under control, European Central Bank Governing Council member Mario Centeno said.
AUD/USD down 0.2% to 0.6215; earlier, rose during Asia session after data indicated Australia’s labor market remains resilient to elevated interest rates.
Source : Bloomberg
