Dollar Resumes Slide as Yen Rises on Verbal Warning
A dollar gauge resumed its slide after three days of advances, while the yen rallied after Japanese Finance Minister Satsuki Katayama said the country has a “free hand” to take bold action against currency moves that aren’t in line with fundamentals.
The Bloomberg Dollar Spot Index fell 0.4%.
The greenback declined against all of peers in the Group of 10
Federal Reserve Governor Stephen Miran said the US central bank risks sparking a recession unless it continues lowering interest rates next year.
USD/JPY dropped as much as 0.6% to 156.71, worst drop since Dec. 16; the pair jumped 1.4% Friday when the Bank of Japan raised interest rates in a widely expected move but gave no clear guidance on the timing of future tightening.
“The moves were clearly not in line with fundamentals but rather speculative,” Katayama said in an interview with Bloomberg on Monday, referring to a sharp weakening of the yen on Friday.
“Against such movements, we have made clear that we will take bold action, as stated in the Japan–US finance ministers’ joint statement,” she said.
“This can only provide a ceiling to USD/JPY but not a big boost to the Japanese currency,” Jayati Bharadwaj, a strategist at TD Securities, said about Katayama’s comments.
The New Zealand and Australian dollars were the best performers in the Group of 10.
AUD/USD climbed by 0.7% to 0.6658
NZD/USD rose 0.7% at 0.5797
GBP/USD gained 0.6% to 1.3462; UK GDP expanded 0.1% q/q in 3Q, matching the median economist estimate in a Bloomberg survey.
Hedging costs in the major currencies remain in free-fall mode, and the pound leads the way as volatility hits record lows versus major peers.
EUR/USD advanced 0.4% to 1.1758 after falling in the past four sessions.
USD/CAD fell 0.4% to 1.3743, its worst drop for the pair since Dec. 10 as loonie is supported by oil prices.
Oil advanced as President Donald Trump intensified a blockade on Venezuela.
Canada is considering changes to its ban on foreign home buyers starting in 2027, its housing minister said.
Former BlackRock Inc. executive Mark Wiseman was named Canada’s ambassador to the US, tapping an experienced investment manager to handle relations with the Trump administration ahead of major trade talks.
Source : Bloomberg.com
