Markets

Yen set for greatest run of positive factors in additional than 2 years

LONDON, Aug 2 (Reuters) – The yen was on observe for its greatest run of positive factors because the depths of the coronavirus disaster in March 2020, as rising U.S.-China tensions over Taiwan and deepening worries a few international financial slowdown boosted the enchantment of safe-haven belongings.

Towards the greenback , the Japanese foreign money was on observe for a fifth consecutive session of positive factors on Tuesday, taking its cumulative improve to just about 4.5% in 5 buying and selling classes. In early London buying and selling, the foreign money was up 0.6% at 130.78 yen, slightly below a excessive of 130.40 yen, a stage final seen in early June.

Jitters concerning the affect of an impending go to to Taiwan by U.S. Home of Representatives Speaker Nancy Pelosi weighed on shares and despatched buyers scurrying into U.S. Treasuries. learn extra

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The benchmark 10-year Treasury yield fell to 2.516%, its lowest since April, additional narrowing the hole between ten-year U.S. debt and equal Japanese bonds to 236 foundation factors (bps), the bottom since early April.

The U.S. economic system shrank for a second straight quarter, knowledge launched final week confirmed, intensifying an ongoing debate over whether or not the nation is, or will quickly be, in recession, with merchants keenly awaiting U.S. jobs knowledge on Friday. learn extra

“U.S. knowledge releases and the response in U.S. yields by the top of this week might be crucial as JPY momentum has constructed a substantial head of steam right here,” mentioned John Hardy, head of FX technique at Saxo Financial institution.

The Australian greenback fell almost 1.5% after the Reserve Financial institution of Australia raised charges by 50 bps to 1.85%, in step with expectations. learn extra

The financial institution mentioned that although extra tightening was anticipated, it was not on a pre-set path, which some buyers interpreted as future coverage tightening is probably not as aggressive.

China’s offshore yuan touched 6.7957 per greenback, its weakest since mid-Could. Some analysts attributed this partly to the tensions round Pelosi’s go to in addition to poor financial knowledge from China over the weekend.

The greenback index , which measures the buck in opposition to six friends, rose 0.3% to 105.65.

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Reporting by Saikat Chatterjee; further reporting by Alun John in HONG KONG
Modifying by Mark Potter

Our Requirements: The Thomson Reuters Belief Ideas.

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