The continued its descent against the yen, hitting a new 15-month low on Thursday. Market participants are anticipating further slide, bracing for further near-term weakness in the US currency.
The dollar dropped further past Wednesday’s nadir of 106.725 yen. It reached 106.42 yen which is the greenback’s weakest level recorded since November 2016. The drop marked a 3.7 percent decline from its early February peak of almost 110.50 yen.
Later, the US currency gained back some momentum and was last down 0.3 percent at 106.67 yen.
“There’s nothing specific, it’s just a continuation of dollar selling that we’ve seen everywhere overnight” said head of sales Tareck Horchani.
According to traders and analysts, the next support level for the dollar was estimated to be at 105 yen.
The dollar gained a lift on Wednesday. This was after a stronger-than-expected rise in US consumer prices in January boosted bets that the Federal Reserve will raise interest rates four times this year.
Gains for the dollar did not last long. Despite changes in the US interest rates expectations, the greenback still ended up broadly declining against its major peers.
The US dollar index, which is used to measure the greenback’s strength against a trade-weighted basket of six other major currencies, dropped to 88.85, falling 0.07 percent.
Market participants questioned the continuous fast pace of the inflation due to “ugly” retail sales report adding to downside momentum.
During Thursday’s Asian trade, the euro inched up 0.1 percent to $1.2459, following a gain of 0.8 percent on Wednesday. Sterling held steady at $1.4004, after also rising 0.8 percent the day before.
Aussie Increases Aided by Employment Data, China on holiday
The Aussie rose following the release of employment data which was slightly better-than-expected on Thursday.
AUD/USD traded at 0.7933, up 0.08 percent.
Australia reported jobs data with the employment change surpassing the expected 15,300 increase, and was up by 16,000 workers instead. The unemployment rate held steady at 5.5 percent and participation rate met expectations at 65.6 percent.
China will be starting the Lunar New Year holidays on Thursday, running through February 21. Other markets in Asia are on shorter holidays including Hong Kong for Thursday and Friday, and Singapore for Friday and Monday.
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