Forex – Dollar near 10-Week Highs, Yen Steady after BoJ

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Forex - Dollar near 10-Week Highs, Yen Steady after BoJ

iq-option.trading – The dollar eased but held near 10-week highs against a currency basket on Wednesday, supported by indications that the U.S. economy remains strong, while the yen remained steady after Bank of Japan’s latest policy announcement.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged down 0.1% to 96.69 by 04:37 AM ET (08:37 AM GMT), after hitting an overnight peak of 96.85, the most since August 15.

Demand for the dollar continued to be underpinned after data on Tuesday showing the U.S. consumer confidence rose to an 18-year high in October, bolstered by a solid labor market.

Indications of strength in the U.S. economy contrasted with a deteriorating outlook for the euro zone, where data on Tuesday showed that economic growth slowed more than expected in the third quarter.

The euro was hovering near 10-week lows against the dollar, with EUR/USD changing hands at 1.1353.

The euro, which is on track for a monthly decline of around 2.2% against the dollar, has been pressured lower by political uncertainty in Germany, following

Chancellor Angela Merkel’s decision to step down in 2021. On ongoing row between Rome and Brussels over Italy’s budget has also weighed on the single currency.

The yen was little changed against the dollar, with USD/JPY last at 113.08 after the BoJ kept monetary policy on hold overnight, but cut its inflation forecasts, indicating that it will continue with its massive stimulus program for some time to come.

The pound was a touch higher, with GBP/USD rising 0.3% to 1.2745, recovering from Tuesday’s 10-week lows of 1.2691.

Sterling weakened broadly on Tuesday after ratings agency Standard and Poor’s warned that a no-deal Brexit would likely tip the UK economy into a prolonged recession.

Meanwhile, the Australian dollar was lower, with AUD/USD sliding 0.25% to 0.7087 after underwhelming domestic inflation data indicated that the country’s central bank is likely to keep interest rates on hold at record lows for longer.

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