The US dollar traded in a narrow range against the euro and the yen after yesterday’s growth, helped by US economic data, as well as the expectation that later this weekthe Federal Reserve will express a tendency to further tighten policy.
Sales in the primary US housing market in July reached the highest level in almost a decade, as evidenced by the data published on Tuesday This indicates the strong momentum of the recovery in the housing market. Positive data boosted expectations of what Fed Chairman Janet Yellen could say in the speech in Jackson.
Futures on interest rates showed that investors see a 24% chance of a rate hike in September, while the probability of such an events was 12%, earlier this month.
“Yellen’s speech on Friday could have a serious impact on the dollar, and we still expect to continue to improve,” – according to BNP Paribas analysts.
The yen briefly rose after the Nikkei news agency reported that the Japanese government will introduce Y4,52 trillion in the economy in the current fiscal year.
The main infusion will be in the form of public construction projects. a supplementary budget proposal was approved on Wednesday
Japanese investment in foreign bonds fell along with the number of foreign investments in Japanese stocks. According to data released by Japan’s Ministry of Finance, foreign bonds investment in August, totaled ¥ 433,1 mld, lower than the previous value of ¥ 1 297,6 mld.
The report estimates the volume of debt securities issued by foreign issuers and placed on the domestic market of Japan. This report reflects the dynamics of capital from the public sector, excluding the Bank of Japan. The net result shows a difference between the rates of inflow and outflow of capital. Despite the positive value, data indicates a decline in the outflow of capital.
Foreign investment in Japanese equities fell in August to ¥ -229,6mlrd after rising ¥ 94mlrd in July.
According to J.P. Of Morgan, after the meeting in Jackson Hole, the US currency will weaken again and USD / JPY is likely to test Y99,55.
EUR / USD: during the Asian session, the pair was trading in the $ 1.1260-80 range
GBP / USD: during the Asian session, the pair was trading in the $ 1.3220-60 range
USD / JPY: during the Asian session, the pair was trading in the Y100.40-65 range
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