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Dollar Struggles to Pare Losses Against Yen, Remains Below 3-Year Lows

1/24/2018, 11:09:50 AMTrading Strategies
Dollar Struggles to Pare Losses Against Yen, Remains Below 3-Year Lows

The dollar rose from lows but remained under pressure as the yen made strong gains shrugging off less hawkish than expected comments from the Bank of Japan following its decision to keep monetary policy unchanged.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.12% to 90.04

In what was a quiet day on the calendar for the top-tier US economic data, the dollar struggled to find its footing after falling to fresh three-and-a-half month lows before paring some of its losses.

The euro continued its trend higher against the greenback as data indicating underlying strength in the US economy, added to the growing speculation that bullish Eurozone growth would force the ECB to consider plans to end its quantitative easing programme.

The ECB is slated to meet on Thursday, when many expect the central bank to keep rates unchanged while ECB president Mario Draghi is likely to downplay any investor expectations that the central bank will soon announce plans to adopt a less dovish stance on monetary policy.

Action Economics said it doesn’t expect major changes to the guidance as ECB president Mario Draghi is unlikely to commit to an end date for quantitative easing.

GBP/USD fell 0.03% to $1.3982 while USD/CAD rose 0.09% to C$1.2457.

USD/JPY fell 0.45% to Y110.41 after the Bank of Japan policy, as expected, kept monetary policy unchanged on Tuesday. The yen, however, shrugged off Bank of Japan (BoJ) governor Haruhiko Kuroda's attempts to curb expectations that the central bank is nearing an eventual exit from its monetary policy programme