Forex Market Update: Dollar Gains against the Yen
The U.S. dollar rose sharply against the yen but fell against the euro as investors took new positions on the last day of the month and second quarter of the year.
However, the dollar index remained mainly steady.
The dollar gains were capped on Friday after several top Federal Reserve officials on Thursday downplayed growing speculation over early tapering of the bond purchase program.
The New York Fed President, William Dudley said that the central bank could embark on more aggressive monetary policy, against current laid out plan of possible squeeze before the year end, should U.S. economic indicators, show signs of weakness.
Earlier this week, Minneapolis Fed President Narayana Kocherlakota also denied that the Fed was now adopting a hawkish policy stance.
At last check, the U.S. dollar gained 0.61% against the Japanese currency to trade at yen98.95.
However, against the euro it was down 0.30% to trade at $1.3077.
Commenting over the currency market, Richard Falkenhall, FX Strategist at SEB Merchant Banking said, “There should be some rebalancing flows going through,” according to Reuters.
“Markets have reacted (indications from Bernanke over possible winding down of the bond purchase program by the year end in last FOMC) like the Fed is going to tighten monetary policy and that is not the case.”
The dollar index, a gauge on U.S. unit’s performance against a basket of six major currencies, inched up 0.1% to 82.990, having risen as high as 83.171 on Thursday, which was its highest level since June 3, showed a data provided by Reuters.
The dollar index was on course to log second consecutive weekly gain.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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