Dollar up in early trade today

5 Jun 2024 , 08:42 AM

Dollar was marginally up in early trade today. Dollar index is up by 0.17% today.

The yen made a 1% increase against the dollar overnight, the biggest increase since Japan interfered in the foreign exchange markets a month ago. The yen fell 0.2% to 155.27 in early trade in the Asia session, and it hovered around 168.74 to the euro.

According to data released on Wednesday, real wages in Japan decreased for a 25th consecutive month in April as inflation outpaced increases in nominal pay. The BOJ Deputy Governor Ryozo Himino stated on Tuesday that the central bank must be “very vigilant” about the potential effects of the yen’s weakness on the economy and inflation. The yen has been the worst-performing G10 currency this year by a considerable margin.

With the Swiss Franc is up for a fourth straight session overnight, and is almost through its 200-day moving average at 0.8902 per dollar. Even if U.S. bond yields decreased, other majors softened their stance on the currency.

During the Asia session, the euro remained stable at $1.0878, while sterling rose to  $1.2770, both slightly weaker than they had been the day before. With Australian GDP statistics due and Westpac predicting yearly growth at just 1%—which, excluding the pandemic years, would be the weakest pace since 1991—the Australian dollar was slightly weaker at $0.6443.

Australia’s chief central banker told the parliament that sluggish growth was anticipated in the March quarter due to demand being restrained by high interest rates.

The Canadian currency retained the middle of a months-long range at C$1.3678 per dollar, while the New Zealand dollar remained stable at $0.6173.

Markets are pricing in a 75% possibility of a rate cut of 25 basis points, the first of its kind among the G7 countries this cycle. Traders will be watching for signs of impending rate cuts. Data on partial jobs and the ISM for US services are also due.

Meanwhile, the past three days have been tumultuous for emerging markets.

Following the narrower than anticipated victory of Narendra Modi, the value of the Indian rupee plummeted to a seven-week low.

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