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Yen Dips In Asia Ahead Of CPI

10/27/2017, 3:30:31 PMMarket Analysis
Yen Dips In Asia Ahead Of CPI

The yen drifted weaker against the dollar on Friday ahead of prices data that will set the tone.

USD/JPY changed hands at 114.06, up 0.08%, while AUD/USD traded at 0.7662, up 0.03%.

In Japan, national core CPI for September is due with a 0.8% gain seen on year and national CPI seen at a 0.7% pace.

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 programme ... 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.

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