The US dollar stabilizes and the yen rises before the Bank of Japan meeting
The US dollar stabilized on Thursday, after falling yesterday as inflation slowed in the United States and bond yields fell, and we are waiting for US retail sales today at 3:30 pm Cairo time.
Core inflation in the United States also reached 0.2% on a monthly basis in December in line with expectations, and on an annual basis the reading fell to 3.2% below the forecast of 3.3%, and traders who were worried about inflation responded with relief, buying stocks and sending the yields of benchmark 10-year Treasury bonds to declines of more than 13 basis points.
USD/JPY
The yen hit its highest level in a month with increasing bets on raising interest rates from the Bank of Japan, where the dollar pair yen was the biggest move against the dollar after the US inflation data that came weaker than expected and also extended its gains in Asia, where the prospects of interest rate cuts by the Fed coincided with expectations about raising interest rates by the Bank of Japan next week, and therefore the Japanese yen rose by about 1.2% in the last two sessions.
Recent statements by Bank of Japan Governor Kazuo Ueda and his deputy Ryuzo himino made it clear that raising interest rates will be discussed at least at the policy meeting next week, and the markets are currently pricing the odds of about 78% for an increase of 25 basis points.
Forecasts suggest that the talk of the governor and a deputy about raising interest rates just before the meeting may test the stagnant waters.
DXY
The dollar made small gains today after three days of losses to rise slightly to 109.15.
There was little immediate reaction in foreign exchange markets to the Gaza ceasefire agreement.
NZD/USD
The New Zealand dollar is trading at 0.5600 dollars, not far from the two-year low reached last Monday.
AUD/USD
The Australian dollar also received only a brief boost from some strong jobs figures before falling back again.
GBP/USD
The pair fell today by 0.4% to 1.2200 dollars, as the pound sterling fell against most currencies, especially after the British inflation data, which came weaker than expected, and then statements from one of the policymakers at the Bank of England said that it was the right time to cut interest rates.
