Yen Slides Versus Other Major Currencies

The yen slid between 0.2 and 0.3 percent against the dollar and the euro on Monday as traders focus on US Federal Reserve and other major central banks monetary policies due later this week.

Markets are in doubt whether the Fed will be able to continue to raise interest rates again later this year. The rise in interest rates last week came as a surprise to many investors who expected the Fed to be more cautious about the economy.

Ahead of the Fed’s meeting last week, investors reduced net bets on the dollar gaining and at the moment the markets forecast a less than 40 percent chance that there will be a Fed hike in interest rates by December.

The US dollar gained 0.1 percent against a basket of major currencies on Monday.

Head of currency strategy at CIBC in London, Jeremy Stretch, thinks that there is a strong indication that the dollar will appreciate.

The Bank of Japan decision not to reduce emergency stimulus for the economy on Friday saw the Yen slide against the euro and the dollar.

The Euro

On Friday the euro gained 0.5 percent against the dollar, but slid 0.1 percent to $1.1185 on Monday.

The defeat of far right Marine Le Pen in the French presidential elections and the landslide victory of Macron last month which was the focus of many global investors has abated since. Sunday’s parliamentary elections gave the French President a landslide victory. Fears of France leaving the EU has reassured investors.

The UK and Brexit

The pound sterling saw little changes and was at $1.2796 ahead of the formal talks with the EU during this week as Britain negotiates its exit.

Barclay’s currency strategist believes that there is an increased risk of a scenario of a no deal or disorderly Brexit which could weigh on the pound, but there is also a likelihood that in the medium term the pound will appreciate.

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