Investing.com – The yen gained ground on Thursday as demand for safe-haven securities underlying was based on a new risk aversion, as the u.s. dollar remained stable in the face of a basket of other currencies following a rebound from a low of two months.
The confidence of the markets deteriorated that night, because of the uncertainty that the United States and China can reach an agreement in the margins of the next G-20 summit in Japan.
The dollar was down 0.14% to 108,34 against the yen at 09h55.
The yen, which tends to attract the traders in times of market turbulence and political tensions, appreciated 0.5% against the australian dollar and 0.15% against the euro.
“Risk aversion and the fall in stock markets supported the yen as usual,” said Bart Wakabayashi, director of the branch office in Tokyo to State Street Bank and Trust.
“The under-performance of the australian dollar is also a supporting factor for the yen. The data of australian jobs today did not seem particularly bad, but apparently, some market players saw it as a new reason to sell the australian dollar.”
The unemployment rate in Australia remained unchanged in may at 5.2%, highlighting the need for a new reduction in interest rates as early as next month.
The australian dollar, which has fallen the day before on the decline in crude oil prices, extended its losses and fell to a low of two weeks to 0,6905.
Despite the growing hopes that the Federal Reserve may ease its monetary policy over the next few months, the us dollar is better behaved as other major currencies such as the euro, the pound and the currencies linked to raw materials, which had their own problems.
The dollar index against a basket of six major currencies, has changed little in 96,912, after an increase of more than 0.3% at night.
The index had fallen to 96,405 Friday, its lowest level since mid-April, following a sharp decline in long-term yields of the u.s. Treasury, which have fallen to their lowest level in two years last week, after the report on employment in the United States has reinforced expectations of an interest rate cut by the Fed.
The euro took a hit after the us president, Donald Trump has said on Wednesday that it planned sanctions on the pipeline project Russian Nord Stream 2 and warned Germany against energy dependence on Russia.
The book was derailed when lawmakers british were defeated on Wednesday an attempt by the labour party of the opposition to attempt to block “Brexit” without an agreement.
“Thanks to the poor performance of the european currencies, the dollar has managed to climb, even though the latest inflation data reinforced expectations of a rate reduction from the Fed,” said Takuya Kanda, director general of the Gaitame.Com Research Institute.
“The market now sees monetary easing by the Fed as a fatality. In the end, the dollar will remain a currency in relatively high yield, even after a rate cut or two.”
The data released on Wednesday show that consumer prices in the United States had barely increased in may, indicating a moderate inflation which, combined with the slowdown of the economy, has increased the pressure on the Fed to lower interest rates this year.
The euro was up slightly, at 1,1298 after falling 0.35% on the night, while the pound slipped to 1,2682 after a loss of 0.3% on Wednesday.
–Reuters contributed to this report