Home Forex Market News Dollar moves off 6-year high versus yen after Abe comments

Dollar moves off 6-year high versus yen after Abe comments

The US dollar paused its rally against the yen, falling back below the key 109.00 yen level and moving off a six-year high of 109.44 hit on last Friday.

The dollar rallied strongly against the Japanese currency since mid-August and has gained almost 7% since then. Investors took the opportunity to take some  profit and sold off USD this week.

A catalyst for closing some dollar positions were comments from Federal Reserve Bank of New York President William C. Dudley who said this week a stronger US currency could hurt US growth.

Meanwhile the yen was given some reprieve today after Japanese Prime Minister Shinzo Abe reportedly voiced concern about the economic impact of the Japanese currency’s recent weakness. He said he would remain watchful of the ill effects of recent yen weakness on local economies (such as smaller firms).

As a result the dollar was soggy in the Asian session, easing down to a low of 108.45. US durable goods orders and PMI data due tomorrow will be watched.

The long term trend for the dollar/yen will not likely change due to the diverging monetary policies between Bank of Japan and Federal Reserve.

The euro edged up 0.1% to 1.2856, holding above Monday’s 14-month low of 1.2815. There was some attention on geopolitical risks, after the US and its allies launched air strikes for the first time against Islamic State militants in Syria on Tuesday.

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