Investing.com – The u.s. dollar remained stable in the face of a basket of rivals Wednesday and the yen fell overall in the face of the improvement of the feeling of risk, but the anxiety caused by the slowdown in global growth and trade tensions between the United States and China seem likely to limit the gains of riskier assets.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, was 95,97 at 03h10 ET (08h10 GMT), unchanged for the day.
The yen weakened against the greenback, the USD / JPY rising 0.26% to 109,64. It was also down against the euro, with EUR / JPY rising 0.32% to 124,61.
During the night, the Bank of Japan kept its monetary policy unchanged and lowered its inflation forecast. The data showing a larger than expected decrease of the exports of December, in the beginning of the day have highlighted the need to continue to support the economy based on the trade.
The australian dollar was slightly higher, with AUD / USD rising 0.18% to 0,7135.
The new zealand dollar has also increased, the NZD / USD up 0.5% to settle at 0,6780 after data showing that inflation had increased slightly in the fourth quarter to reduce the probability of lower interest rates.
The currency markets have been disrupted in recent weeks due to concerns regarding a variety of issues ranging from the Brexit to the slowdown in global growth and the prospects of major central banks.
“The nervousness linked to the global growth and trade tensions is certainly a determining factor markets at the present time,” said Michael McCarthy, chief strategist at CMC Markets.
“The markets have also changed dramatically since the end of December. The recent correction in shares may also be due to positioning.”
On Monday, the international monetary Fund has reduced its forecast for global growth to 2019 and 2020, citing a slowdown greater than expected in China and in the euro area, and stated that the lack of resolution of trade tensions could further reinforce the slowdown of the global economy.
The growth in China last year was the slowest since 1990, and is expected to weaken before the onset of the stimulus.
Investors are hoping for a breakthrough in trade negotiations between the United States and China, the trade war between the two largest economies in the world spooking the markets.
A report in the Financial Times according to which the United States had rejected the bid of China in relation to trade negotiations has dulled the sense of risk, even if a White House adviser was belied by the result.
The euro and the pound sterling remained unchanged against the u.s. dollar: the EUR / USD to 1,1356 and the GBP / USD to 1,2962.
The british pound gained 0.5% against the greenback on Tuesday, after data showing that the uk labour market has remained strong despite an economic slowdown prior to the upcoming maturity of Brexit on the 29th of march.
The british pound is close to the peaks reached the last time in mid-November, a sign that traders expect that Britain avoids a output chaotic of the european Union.
Since the legislature has rejected the divorce agreement between the First minister Theresa May and the european Union last week during the biggest defeat in the history of the Great Britain modern, legislators have attempted to trace the path of the crisis.
“The market now spreading to completely the prospect of a hard Brexit, while political risk still remains relevant and that the volatility will only increase if no clear path is not visible to the market,” said Kathy lien, director-general of the monetary policy strategy at BK Asset Management,
– Reuters contributed to this report.