Yen hits 2-1/2-month high vs dollar, but off highs after US data
U.S. GDP in Q2 rises more than expected
U.S. jobless claims fall unexpectedly
U.S. durables plunge in June
Future market price higher chance of BOJ rate hike
Dollar falls to lowest since May vs yuan
Recasts, adds new comment, U.S. data, bullets, FX table, byline, NEW YORK dateline, updates prices
By Gertrude Chavez-Dreyfuss and Harry Robertson
NEW YORK/LONDON, July 25 (Reuters) -The Japanese yen rallied for a fourth straight session against the dollar on Thursday, hitting a 2-1/2-month high, as investors unwound their long-running bets against the currency ahead of a Bank of Japan meeting next week.
The unwinding of the short bets against the yen, the funding currency used in carry trades, came as a plunge in global stocks in recent sessions drove investors towards traditionally safe assets such as the Swiss franc and Japanese currency. U.S. equities, however, recovered on Thursday after a steep sell-off in the previous session.
In a carry trade, an investor borrows in a currency with low interest rates and invests the proceeds in higher-yielding assets.
The dollar, however, trimmed losses against the yen and euro after data showed the world's largest economy expanded faster than expected and inflation slowed in the second quarter, disputing brewing expectations of a larger than expected rate cut in September, or Federal Reserve easing at next week's meeting.
The greenback was last down 0.1% on the day at 153.63 yen JPY=EBS.
The rate futures market has priced in a 67.2% chance that the BOJ will raise rates next week, up from about 40% earlier in the week, according to LSEG estimates.
"I think the short-covering in the yen has run its course," said Marc Chandler, chief market strategist at Bannockburn Forex in New York. "That should take pressure off the Aussie (Australian dollar) and Kiwi (New Zealand dollar), which have been pummelled this week, but also the Mexican peso."
The euro was slightly up against the dollar at $1.0852 EUR=EBS, with the dollar index down 0.1% at 104.27 =USD. The index was at 104.21 just before the data release.
Advance estimates showed that U.S. gross domestic product (GDP) grew at a 2.8% annualized rate in the last quarter. Economists polled by Reuters had forecast GDP rising at a 2.0% rate.
The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, increased at a 2.9% rate after surging at a 3.7% pace in the first quarter.
AHEAD OF ITSELF
"The market got ahead of itself on Fed cuts. Before the GDP number, the market is pricing as if the Fed is going to cut 50 basis points in September," Chandler said.
He also cited comments from former New York Fed President Bill Dudley in a Bloomberg column on Wednesday, who said the Fed should cut rates next week, citing recent employment data.
"But the GDP number shows that the Fed is not under that kind of urgency," Chandler said. "The market is pricing a less than 10% chance of a cut next week."
The Fed remains firmly on track to cut interest rates at September, according to fed funds futures data. The futures market has also priced in about 70 basis points (bps) of cuts this year, based on LSEG calculations.
U.S. jobless claims data were also consistent with a stable-economy trend.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 235,000 for the week ended July 20, the data showed. Economists polled by Reuters had forecast 238,000 claims for the latest week.
The only blemish, however, was the U.S. durables report, which showed durable goods orders fell 6.6% in June, compared with expectations for a 0.3% rise.
In other currencies, the Australian dollar AUD=D3 fell to US$0.6519, its lowest since early May. It was last down 0.5% against the greenback at US$0.6547.
China's yuan CNY=CFXS rallied against the dollar, which fell to its lowest since early May at 7.234, as the yen's rally spilled over to the Chinese unit.
The rise came even as the country's central bank surprised markets for a second time this week by conducting an unscheduled lending operation on Thursday at steeply lower rates, more monetary stimulus to prop up the economy.
Currency bid prices at 25 July 02:59 p.m. GMT | |||||||
Description | RIC | Last | U.S. Close Previous Session | Pct Change | YTD Pct | High Bid | Low Bid |
Dollar index | =USD | 104.26 | 104.38 | -0.1% | 2.85% | 104.45 | 104.07 |
Euro/Dollar | EUR=EBS | 1.0854 | 1.084 | 0.14% | -1.66% | $1.0859 | $1.0829 |
Dollar/Yen | JPY=D3 | 153.65 | 153.86 | -0.16% | 8.91% | 154.16 | 151.96 |
Euro/Yen | EURJPY= | 1.0854 | 166.79 | -0.02% | 7.15% | 167.22 | 164.83 |
Dollar/Swiss | CHF=EBS | 0.8798 | 0.8852 | -0.6% | 4.54% | 0.8854 | 0.8778 |
Sterling/Dollar | GBP=D3 | 1.2875 | 1.2906 | -0.23% | 1.19% | $1.2913 | $1.0829 |
Dollar/Canadian | CAD=D3 | 1.3816 | 1.3808 | 0.07% | 4.24% | 1.385 | 1.3805 |
Aussie/Dollar | AUD=D3 | 0.6552 | 0.6582 | -0.43% | -3.89% | $0.6582 | $0.6511 |
Euro/Swiss | EURCHF= | 0.9549 | 0.9594 | -0.47% | 2.83% | 0.9598 | 0.9522 |
Euro/Sterling | EURGBP= | 0.8429 | 0.8397 | 0.38% | -2.76% | 0.8431 | 0.8395 |
NZ Dollar/Dollar | NZD=D3 | 0.5903 | 0.593 | -0.45% | -6.58% | $0.593 | 0.5873 |
Dollar/Norway | NOK= | 11.0308 | 11.0265 | 0.04% | 8.84% | 11.1381 | 10.9949 |
Euro/Norway | EURNOK= | 11.9683 | 11.953 | 0.13% | 6.63% | 12.0856 | 11.9317 |
Dollar/Sweden | SEK= | 10.8032 | 10.7772 | 0.24% | 7.31% | 10.8685 | 10.765 |
Euro/Sweden | EURSEK= | 11.7267 | 11.6822 | 0.38% | 5.4% | 11.7786 | 11.6784 |
Reporting by Gertrude Chavez-Dreyfuss in New York and Harry Robertson in London; Additional reporting by Rae Wee in Singapore; Editing by Alex Richardson and Mark Potter
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
