The dollar is down against all of its major rivals Monday afternoon, but its most significant pullback is in comparison to the British pound. The pound is gaining strength at the start of the new trading week, as concerns over a potential British exit of the European Union, or “Brexit,” have eased.
A YouGov poll for the Sunday Times found support for “Remain” rising 5 points to 44 percent, while support for “Leave” has declined 3 points to 43 percent.
A Survation poll for The Mail showed the “Remain” with a three-point lead, surging up by 45 percent, compared to a 42 percent backing for the Leave vote.
These were the first opinion polls on the EU referendum since the killing of lawmaker Jo Cox. The polls showed a shift among British voters towards the “Remain” camp. While the issue is still too close to call ahead of Thursday’s referendum, the perception among investors appears to be that the “Leave” camp has lost the momentum they had built up in recent weeks.
The dollar sank to over a 2-week low of $1.4707 against the pound sterling Monday, but has since bounced back to around $1.4665.
The average asking price for a house in the United kingdom was up 0.8 percent on month in May, property tracking website Rightmove said on Monday, coming in at 310,471 pounds. That follows the 0.4 percent increase in April.
The buck dropped to a low of $1.1382 against the Euro Monday morning, but has since rebounded to around $1.1310.
Eurozone construction output decreased for the third straight month in April, Eurostat reported Monday. Construction output dropped 0.2 percent month-on-month in April after falling 1 percent in March and 0.7 percent in February. This was the third consecutive month of decline.
Germany’s producer prices declined at a slower pace in May, figures from Destatis showed Monday. Producer prices dropped 2.7 percent in May from last year, but slower than the 3.1 percent decrease in April and a 2.8 percent drop forecast by economists.
Bank of Japan Governor Haruhiko Kuroda said inflation expectations in practice are highly sticky and change only slowly.
This means that in the actual formation of inflation expectations, the backward-looking component determined by actual inflation rates observed in the past plays a large role, he said in Tokyo on Monday.
Kuroda added that pushing inflation expectations back up to close to the target inflation rate and to re-anchor them there plays an extremely important role in the process of overcoming deflation.
The International Monetary Fund said Japan will require a more sustainable and coordinated policy upgrade to achieve Abenomics ambitious targets in the current scenario.
Abenomics has met with initial success as strong coordination with the Bank of Japan and structural reforms narrowed the large output gap, reversed the undue appreciation of the yen and lifted inflation into positive territory, the IMF said in a statement on Monday.
But the recovery and progress with reflation stalled, the lender observed.
The greenback has slipped to around Y104.040 against the Japanese Yen this afternoon, from an early high of Y104.841.
Japan posted a merchandise trade deficit of 40.7 billion yen in May, the Ministry of Finance said on Monday. That missed forecasts for a surplus of 70.0 billion yen following the 823.5 billion yen surplus in April.
The material has been provided by InstaForex Company – www.instaforex.com