🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

FOREX-Dollar dips versus yen after data-inspired surge, G20 holds few surprises

Published 29/02/2016, 02:03 pm
© Reuters.  FOREX-Dollar dips versus yen after data-inspired surge, G20 holds few surprises
EUR/USD
-
USD/JPY
-
AUD/USD
-
NZD/USD
-
DX
-
DXY
-

* Profit taking shaves gains after dollar rallies Friday

* No fresh action from G20, focus turns to data

* Euro flat, Aussie and kiwi nurse broad losses (Updates throughout)

By Shinichi Saoshiro and Ian Chua

TOKYO/SYDNEY, Feb 29 (Reuters) - The dollar took a breather against the yen on Monday following a steep climb on upbeat U.S. data, while reaction to a weekend meeting of G20 policymakers was muted as the outcome produced no major surprises.

The dollar was down 0.4 percent at 113.53 yen JPY= after rising roughly 0.9 percent to a high of 114.00 on Friday when a positive set of U.S. data helped revive prospects of the Federal Reserve hiking interest rates this year.

Indicators showed a solid rise in U.S. consumer spending and the personal consumption expenditures (PCE) price index. Fourth quarter U.S. GDP growth was also revised up to 1 percent.

ECONUS

The dollar had sunk to a 16-month low below 111 yen earlier this month as risk aversion driven by global growth concerns -notably towards the Chinese economy- and turbulence in equities markets stoked demand for the safe-haven yen.

"The biggest factor behind the dollar's recent rebound is trust in the U.S. economy being resurrected. Reviving expectations for a rate hike by the Fed is a key factor to halt the dollar's recent depreciation," said Koji Fukaya, president of FPG Securities in Tokyo.

"It is premature to declare that the yen's rally is over. But recent long positions on the yen were among some of the biggest we have seen over the past 10 years, and it appears that speculators are beginning to unwind these large positions."

Net long contracts on the yen rose to 52,734 in the week ended Feb.23 from 47,901 the week before, Commodity Futures Trading Commission data showed. That was the largest long position since February 2012. dollar index was steady at 98.054 .DXY , within reach of a three-week high of 98.260 scaled on Friday.

The euro stood nearly unchanged at $1.0929 EUR= after retreating 0.8 percent on Friday. A move below $1.0912 would take the common currency to a one-month trough.

The weekend's G20 meeting ended with no new coordinated action to spur global growth.

A communique from the Group of 20 finance ministers and central bankers flagged a series of risks to world growth, including volatile capital flows, a sharp fall in commodity prices and the potential "shock" of a British exit from the EU.

G20 ministers agreed to use "all policy tools - monetary, fiscal and structural - individually and collectively" to reach the group's economic goals. for any substantive commitments out of G20 were sufficiently low such that we shouldn't expect any significant market response early this week," said Ray Attrill, global co-head of FX strategy at National Australia Bank.

The Australian dollar was flirting with 71 U.S. cents AUD=D4 , nursing a 1.5 percent drop on Friday. Its New Zealand counterpart was near 66 cents NZD=D4 after suffering a 1.4 percent slide.

Australia's central bank meets on Tuesday and is expected to keep interest rates unchanged. The market will be keen to hear its latest assessment on the global economy. (Editing by Richard Balmforth & Shri Navaratnam)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.