Foreign exchange traders favoured the Yen against the dollar going into this evening’s Federal Reserve interest rate decision, with the prospect of a hint at rate cuts later in the year.
The Federal Reserve is not expected to cut rates this evening.
Today’s recovery in the Yen against the dollar follows a week of dollar strength as the greenback rebounds from the worst bout of selling in years.
“In the currency markets, the strength of the Japanese Yen is today’s standout feature, with widespread gains for the Yen against a broad basket of other leading currencies. Sterling is trading steadily, holding at around $1.226 and €1.156,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.
Having built a base around 143.00 – 144.00 through June, the 149.00 USD/JPY level is proving to be a level of resistance. A hawkish Fed this evening could see this level broken to the upside.