Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

FOREX-Dollar slides vs yen as markets continue to seek safety

Published 21/01/2016, 08:07 am
© Reuters.  FOREX-Dollar slides vs yen as markets continue to seek safety
USD/JPY
-
AUD/USD
-
USD/CAD
-
NZD/USD
-
DX
-
CL
-
DXY
-

* Dollar pares losses, but still down vs yen

* Oil-linked currencies lose big vs dollar

* Loonie reverses slide vs greenback, looks to end 13-day losing streak (Updates prices, adds quote)

By Dion Rabouin

NEW YORK, Jan 20 (Reuters) - The dollar fell to a more than one-year low against the Japanese yen JPY= on Wednesday as crude oil prices dropped near a 13-year trough, the U.S. stock market tumbled, and risk appetite waned.

The U.S. currency recovered slightly in afternoon trading, but remained down 0.6 percent at 116.94 yen after hitting a session low of 115.96 yen.

"Overnight, the yen was appreciating on global equities selling off everywhere and oil also following," said John Doyle, director of markets at Tempus Consulting in Washington.

"Equities here in the United States are getting crushed - carnage would be the word - so the safe-haven yen has been the beneficiary of this sell-off in global equities."

Investors said the yen could climb as high as 110 per dollar this year, said Karl Schamotta, director of FX strategy and structured products at Cambridge Global Payments in Toronto, as many anticipate the Bank of Japan will not employ additional stimulus measures or accelerate its quantitative easing program.

"That's a fairly substantial reversal from where we were," Schamotta said, "and certainly I think that the bazooka that (Japanese Prime Minister Shinzo) Abe was deploying last year has run out of ammunition."

Further bolstering the yen versus the dollar was data showing U.S. consumer prices unexpectedly fell in December That suggests inflation may be slow to rise toward the Federal Reserve's target and that the dollar's value will unlikely increase.

But oil's continued slide also pushed traders out of commodity currencies and into the dollar.

The dollar index .DXY , which measures the greenback against six major currencies, rose modestly to 99.102, up about 0.1 percent, as investors unwound positions in currencies like the Australian AUD= and New Zealand NZD= dollars.

The Aussie fell as much as 0.98 percent, and the kiwi shed as much as 0.99 percent against the greenback during the day. Both, though, pared losses in the afternoon session.

The dollar also rose sharply against oil-linked currencies like the Brazilian real, Norwegian crown and Russian rouble, which fell to its lowest since redenomination in 1998.

The Canadian dollar CAD=D4 was the day's most erratic currency. The loonie gained a full cent earlier in the session against the U.S. dollar after the Bank of Canada decided to keep its 0.5 percent overnight target interest rate unchanged, but surrendered the gains soon after.

It most recently looked set to end a 13-day losing streak against its U.S. counterpart, with the U.S. dollar down 0.6 percent to C$1.4485.

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.