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

FOREX-Dollar hits 2-week high vs yen on U.S.-Japan summit relief

Published 13/02/2017, 03:02 pm
© Reuters.  FOREX-Dollar hits 2-week high vs yen on U.S.-Japan summit relief
EUR/USD
-
USD/JPY
-
AUD/USD
-
NZD/USD
-
DX
-
DXY
-

* Dollar/yen hits 2-week high, euro/dollar near 3-1/2-week low

* Relief as currencies were not high on U.S.-Japan summit agenda

* Dollar resumes rise on tax reform hopes

* Kiwi edges back after being hit by RBNZ last week, Aussie steady (Updates prices, adds details and quotes)

By Shinichi Saoshiro

TOKYO, Feb 13 (Reuters) - The dollar rose to a two-week high versus the yen on Monday, with the market breathing a sigh of relief as the closely watched two-day U.S.-Japan summit held over the weekend was seen to have ended smoothly.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe appeared to have established a quick friendship through a hug, a prolonged handshake and rounds of golf, allaying investor fears of the meeting ending acrimoniously with Trump talking tough on trade, currency and security issues. dollar index against a basket of major currencies was up 0.15 percent at 100.930 .DXY , close to a near two-week high of 101.010 reached on Friday when pledges of "phenomenal" tax reforms by Trump had boosted the greenback.

The dollar was up 0.65 percent at 113.920 yen JPY= , briefly touching 114.170, the highest since Jan. 30.

"There is relief that the summit ended without confrontation, and that the joint statement did not directly touch upon currency issues," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.

There was concern prior to the summit that Trump would reiterate accusations that Japan was one of several countries devaluing their currencies to the disadvantage of the United States.

"While the outcome of the U.S.-Japan summit itself is not a huge dollar boosting factor, the currency continues to receive firm support from expectations towards Trump's 'phenomenal' tax plans," Yamamoto said.

Trump said his administration would be announcing "something phenomenal in terms of tax" over "the next two or three weeks" during a meeting with airline executives on Thursday.

The president's comments increased risk appetite, sending Wall Street shares to record highs on Friday, in turn lifting U.S. Treasury yields from multi-week lows to the dollar's advantage.

The market's near-term focus was on Federal Reserve Chair Janet Yellen's congressional testimony scheduled for Tuesday and Wednesday. Investors are keen to gauge Yellen's policy stance after the central bank upgraded its inflation views earlier this month.

"Trump has just taken a positive approach to tax reforms and infrastructure spending. It remains to be seen if this has any impact on Yellen, as the Trump administration's lack of policy clarity seemed like a factor that made the Fed hesitant to raise rates," said Koji Fukaya, president at FPG Securities.

U.S. indicators being awaited for their potential market impact included the January producer price index (PPI) on Tuesday, the January consumer price index (CPI) and retail sales on Wednesday and housing-related data on Thursday.

The euro was down 0.2 percent at $1.0621 EUR= , dipping close to Friday's 3-1/2-week low of $1.0608.

The common currency fell 1.3 percent last week, its biggest weekly loss in three months, as political risks rose on the back of election concerns in countries such as France and Germany. Resurfacing Greek debt woes further hurt confidence towards the euro zone.

Elsewhere, the New Zealand dollar inched up 0.1 percent to $0.7203 NZD=D4 . It continued to edge away from a 2-1/2-week low of $0.7172 struck Thursday after the Reserve Bank of New Zealand (RBNZ) signalled that it would keep interest rates at record lows for two years.

"The RBNZ has clearly knocked the New Zealand dollar lower. However, we still find it difficult to get overly bearish given a still solid economic picture," wrote Philip Borkin, senior economist at ANZ.

The Australian dollar was little changed at $0.7671 AUD=D4 after surging 0.7 percent on Friday on upbeat Chinese trade data and an optimistic economic view given by the Reserve Bank of Australia. A rise above $0.7696 would take the Aussie to a three-month high. (Editing by Richard Pullin and Jacqueline Wong)

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.