The U.S. dollar maintained its position near two-week highs against the Japanese yen, after a one-day rally against major currencies, as recent U.S. economic data reduced fears of an impending recession. The dollar’s strong performance was particularly notable against the yen, supported by higher Treasury yields.
The rise comes as market traders trimmed their expectations for the Federal Reserve to implement a strong monetary easing policy next month.
Risk-sensitive currencies, such as the pound, also showed resilience, buoyed by upbeat economic outlook that sparked a rally in equity markets.
The dollar index, a measure of the value of the dollar against a basket of six major currencies including the yen, pound sterling and euro, remained relatively stable at 103.20 after seeing a 0.41% rise overnight, the biggest increase since July 18.
The U.S. dollar eased slightly to 149.11 yen, but remained near Thursday’s peak of 149.40 yen, a level not seen since Aug. 2 August. U.S. Commerce Department data revealed that retail sales in July July beat expectations for an increase of 1.0%, beating expectations of a 0.3% rise.
In addition, unemployment claims came in below expectations, with 227,000 Americans applying for benefits last week, lower than the expected 235,000.
Market traders are confident that the Fed will approve rate cuts on September 18, although there is controversy over the extent of the cut.
Read also:Sterling extends gains to two-week high amid bullish expectations
The probability of a significant 50 basis point cut is currently 25%, down from 36% just a day ago, as noted by CME Group’s interest rate monitoring tool FedWatch. Earlier in the month, unexpectedly weak payroll data raised the likelihood of a further cut to 71%.
He suggested that the next level to watch for USD/JPY is 150 yen against the dollar, stressing that the current data flow does not pose a significant threat to market sentiment in the near term.
Sterling rose modestly to $1.2859, adding to its overnight gain of 0.21%. The British currency was further supported by strong GDP figures released on Thursday. Meanwhile, the euro remained unchanged at $1.0973 after falling 0.36% in the previous session.
The Australian dollar, which is affected by shifts in risk appetite, settled at $0.66105, after rising 0.2% the previous day, supported by employment data that showed jobs rising, beating expectations.
Reuters contributed to this article.
This article was translated with the help of an artificial intelligence program after an editor’s review. For more details please refer to Banha Terms and Conditions
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