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The US dollar slipped to two-week lows against the yen in Thursday’s Asian session as a combination of disappointing US homes sales numbers and a relatively upbeat summary of opinions by the Bank of Japan drove the greenback below 117 yen. The euro rebounded back above 1.04 dollars, while commodity-linked currencies also made modest gains.
An unexpected drop in pending home sales in the United States in November raised concerns about the possible impact of rising interest rates on the housing market. Yesterday’s data revealed higher mortgage rates in November contributed to the pending sales index declining to the lowest since January.
Another reason for the dollar’s slide was a drop in the yield of US Treasury notes. The US government saw strong demand at its latest bond auction on Wednesday, which led to an increase in Treasury bond prices and in turn, to lower yields.
Meanwhile, the Bank of Japan’s summary of opinions of its December policy meeting suggested the likelihood of further easing is diminishing as most members saw the economic outlook improving. The summary said Japan’s economy is on a “moderate recovery trend” and one board member thought the yield target on 10-year Japanese government bonds should be higher than the current level of around zero percent.
This added to the positive sentiment for the yen today, pushing the dollar to as low as 116.23 yen in late Asian trading before recovering slightly to 116.45 yen.
The euro and the pound both benefited from the dollar sell-off to recoup Wednesday’s losses. The euro climbed to a session high of 1.0464 dollars, having fallen to one-week low of 1.0371 yesterday. The pound managed to recover back above 1.22 dollars after diving to a two-month low of 1.2197 yesterday.
Commodity currencies also saw a rebound today despite oil prices coming under pressure from a surprise fall in US crude stocks. Data from the American Petroleum Institute showed US stocks rose by 4.2 million barrels in the week ending December 17, versus forecasts of a 1.5 million decline. WTI oil fell back below $54 a barrel after the data, but Brent crude slipped only marginally before rising again and was up on the day at $56.45 a barrel in late Asian trading.
The muted reaction as well as a broadly weaker greenback supported the Canadian dollar higher on Wednesday. The US dollar had hit a fresh 10-month high of 1.3598 versus the loonie yesterday but was down at 1.3515 in late Asian trading today.
The Australian and New Zealand dollars also moved higher, with the both gaining 0.5% versus the greenback by late Asian session. The aussie was last up at 0.7214, while the kiwi was trading at 0.6950.
Looking ahead to the rest of the day, US weekly jobless claims and trade figures for November will come into focus, ahead of the latest EIA oil inventory report.
An unexpected drop in pending home sales in the United States in November raised concerns about the possible impact of rising interest rates on the housing market. Yesterday’s data revealed higher mortgage rates in November contributed to the pending sales index declining to the lowest since January.
Another reason for the dollar’s slide was a drop in the yield of US Treasury notes. The US government saw strong demand at its latest bond auction on Wednesday, which led to an increase in Treasury bond prices and in turn, to lower yields.
Meanwhile, the Bank of Japan’s summary of opinions of its December policy meeting suggested the likelihood of further easing is diminishing as most members saw the economic outlook improving. The summary said Japan’s economy is on a “moderate recovery trend” and one board member thought the yield target on 10-year Japanese government bonds should be higher than the current level of around zero percent.
This added to the positive sentiment for the yen today, pushing the dollar to as low as 116.23 yen in late Asian trading before recovering slightly to 116.45 yen.
The euro and the pound both benefited from the dollar sell-off to recoup Wednesday’s losses. The euro climbed to a session high of 1.0464 dollars, having fallen to one-week low of 1.0371 yesterday. The pound managed to recover back above 1.22 dollars after diving to a two-month low of 1.2197 yesterday.
Commodity currencies also saw a rebound today despite oil prices coming under pressure from a surprise fall in US crude stocks. Data from the American Petroleum Institute showed US stocks rose by 4.2 million barrels in the week ending December 17, versus forecasts of a 1.5 million decline. WTI oil fell back below $54 a barrel after the data, but Brent crude slipped only marginally before rising again and was up on the day at $56.45 a barrel in late Asian trading.
The muted reaction as well as a broadly weaker greenback supported the Canadian dollar higher on Wednesday. The US dollar had hit a fresh 10-month high of 1.3598 versus the loonie yesterday but was down at 1.3515 in late Asian trading today.
The Australian and New Zealand dollars also moved higher, with the both gaining 0.5% versus the greenback by late Asian session. The aussie was last up at 0.7214, while the kiwi was trading at 0.6950.
Looking ahead to the rest of the day, US weekly jobless claims and trade figures for November will come into focus, ahead of the latest EIA oil inventory report.