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Dollar gains in Asia as recent yen strength wanes slightly

3/30/2017, 9:56:22 AMMarket Analysis
Dollar gains in Asia as recent yen strength wanes slightly

The dollar gained some ground on the yen in Asia on Thursday as market talk grows the Bank of Japan has eyed recent strength as unwarranted while the pound gained slightly as formal start of Brexit overnight has not roiled the currency

USD/JPY changed hands at 111.22, up 0.15%. GBP/USD traded at 1.2449, up 0.11%. AUD/USD traded flat at 0.7670 after HIA new home sales rose 0.2% month-on-month in February, compared to a 2.2% decline the previous month.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.11% to 99.89.

Overnight, the dollar rose against a basket of major currencies on Wednesday, buoyed by better than expected U.S. home sales data while a slump in both the euro and pound underpinned upside momentum in the greenback.

The dollar continued its stuttering recovery from multi-month lows, hitting a session high of 99.96, after the U.S. National Association of Realtors said its pending home sales increased by 5.5% last month, which was far above economists’ forecast of a 2.4% increase.

Meanwhile, several comments from Federal Reserve officials helped shift investors’ focus to the prospect of additional rate hikes this year, after Fed member Charles Evans said he has confidence that two total rate increases in 2017 seems “very safe”.

Federal Reserve Bank of Boston President Eric Rosengren took a somewhat bullish outlook on possible rate hikes, after he said the U.S. central bank should be prepared to raise interest rates a total of four times in 2017 to prevent the U.S. economy from overheating.

Elsewhere, sterling lost ground against the greenback overnight after British Prime Minister Theresa May triggered Article 50.