Asia FX weak as Fed does little to soothe rate fears; yen rebound stalls
Investing.com-- Most Asian currencies kept to a tight range on Thursday, taking little advantage of a drop in the dollar as the Federal Reserve said interest rates were unlikely to fall in the near-term, although they were also unlikely to rise.
The dollar sank from near six-month highs after the Fed’s comments, but steadied in Asian trade. The prospect of U.S. rates remaining high for longer bodes well for the greenback.pair, which is inversely related to yen strength, surged 1% to over 156 on Thursday, after falling as low as 153 in overnight trade.
The USDJPY pair had tumbled from 160 on Monday, which traders said was the new line in the sand for Japan when it came to yen weakness. But the factors weighing on the yen- chiefly a dovish Bank of Japan and a wide gap between local and U.S. rates- are expected to remain in play, limiting the effect of government intervention.
Still, the outlook for the dollar remained buoyed by the prospect of rate cuts by the Fed until at least the fourth quarter.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events.
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