Yen Weaker In Asia As CPI Misses Expectations, EUR, GBP Down
The dollar held strength in Asia on Friday as the yen was hit by weaker than expected prices data and the euro and pound fell on tapering and Brexit concerns respectively.
USD/JPY changed hands at 114.13, up 0.14%, while AUD/USD traded at 0.7659, own 0.01%. EUR/USD slipped 0.13% to 1.1637 and GBP/USD fell 0.24% to 1.3129.
In Japan, national core CPI for September rose 0.7%, a tad weaker than the 0.8% gain seen on year and national CPIedged up 0.7% as expected.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted up 1.09% to 94.55.
Overnight, the dollar rose against a basket of major currencies on Thursday benefitting from a slump in the euro after European Central Bank president Mario Draghi indicated that the central bank’s bond-purchasing program could be extended beyond September 2018.
The European Central Bank announced its intention to rein in monetary stimulus, reducing its monthly purchases of bonds to €30 billion while extending its bond purchasing programme for a period of nine months through September 2018.
The reduction in the amount of bond purchases was widely expected but investors were surprised by somewhat dovish comments from ECB president Mario Draghi.
Draghi insisted that the central bank’s bond buying programme is “open ended”, dashing investor expectations that the onset of quantitative tightening would inch the central bank closer to consider an end date for its massive bond-buying programme.
“The decision today is for an open-ended program ... it’s not going to stop suddenly. The large majority of the Governing Council expresses a preference for keeping it open-ended,” Draghi said at press conference. The plunge in the euro helped the dollar surge to a more-than-three-month high amid the release of mixed economic data.
The pound has also drifted weaker as the British government said on Thursday its key piece of Brexit legislation would be debated in parliament on Nov. 14 and 15, the next stage in what is expected to be a tortuous lawmaking process that will test Prime Minister Theresa May's authority.
Weakness in the housing sector continued as the National Association of Realtors’ pending home sales was flat in September, missing expectation of a 0.2% rise.
The U.S. Department of Labor reported Thursday that initial jobless claims increased 10,000 to a seasonally adjusted 233,000 for the week ended Oct. 21, beating forecasts of a 12,000 increase.