Home Forex Market News Asian Session – Dollar surges above 110 yen for first time since...

Asian Session – Dollar surges above 110 yen for first time since 2008

The dollar strengthened above 110 yen for the first time since August 2008 and gained versus most of its major counterparts. The US is the only major economy which is on a stable path toward monetary policy normalization so the greenback is in strong demand. There is growing speculation an improving economy will give the Federal Reserve more reason to increase interest rates.

The dollar hit a fresh 6-year high of 110.08 yen in early Asian session trading. Despite a good Bank of Japan Tankan survey today, focus was on the greenback. The bullish dollar/yen helped pull up the euro versus the yen as well despite broad euro weakness. The euro/yen hit a high of 138.79 yen.

Against the dollar, the euro moved off yesterday’s 2-year low of 1.2570 and opened in Asia at 1.2631. The single currency came under pressure yesterday after soft Eurozone inflation data and will likely remain under pressure ahead of the European Central Bank meeting on Thursday especially if Eurozone PMI data today will be weak. This would intensify pressure on the ECB to take more easing measures to boost the Eurozone economy.

Sterling edged down from 1.6217 to 1.6177 due to broad dollar strength. A series of UK PMI data today and the rest of the week will be closely watched.

The aussie slid to an 8-month low of 0.8662 after Australian retail sales grew less than economists forecast. Chinese manufacturing PMI data had little impact on the currency as the figures were in line with expectations.

Looking ahead, manufacturing PMI data from Europe, the UK and the US will be released.

 

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