Investing.com – The dollar is trading near a low of a week versus the yen Thursday, while declines in the yields of the u.s. Treasury have reinforced expectations that the u.s. federal Reserve will reduce its interest rates later this month.
The obligations of the State are in the middle of a rally to the upside, which has pushed the yields of the u.s. Treasury to its lowest level in more than two and a half years and has pushed european yields to record lows on rising bets that the major central banks will reduce rates to support the global economy.
The expectations-decreasing with respect to the rapid resolution of the trade war between the United States and China have also hurt sentiment for the dollar.
The investors entered their attention on the data NFP non-farm employment in the United States, expected on Friday and which economists expect an increase of 160,000 in June, compared to 75,000 in may.
Job data in the positive should not support the dollar as expectations of lower u.s. rates are high, because of the weakness of inflation and fallout from the trade war.
“When u.s. yields are so low, you can’t expect people to crowd in and buy the dollar,” said Junichi Ishikawa, a strategist currency at IG Securities in Tokyo.
“The feeling is for a test of the dollar’s decline. It is expected to lower rates in Europe and in the United Kingdom, so it might be easier for the dollar move against the yen.”
The dollar was little changed at 107,79 yen on Thursday, after touching a low of one week to 107,54 yen on Wednesday.
The greenback has fallen 3.5% against the yen over the last three months, while growing signs indicate that the Fed will cut rates at its meeting of 30 and 31 July.
The dollar index against a basket of six major currencies, was little changed at 96,35.
Transactions on the forex will probably be weak on Thursday, the u.s. financial markets were closed for a holiday.
The administration of u.s. president Donald Trump on Wednesday announced the programming of a call with the chinese negotiators next week to mark the resumption of negotiations between the two countries.
The expectations for a settlement without clashes of the conflict have faded after Mr. Trump has said that any agreement should be a little tilted in favor of the United States.
The euro is trading near a low of two weeks to 1,1282.
The common currency has weakened since the appointment of Ms. Christine Lagarde, managing Director of the IMF, seen as a dove policy, as the next president of the European Central Bank.
The pound traded at 1,2580, stuck near a low of two weeks to 1,2557 dollar due to speculation that the Bank of England will abandon its preference for a higher interest rate and switch to the camp dovish, because of the trade war and the uncertainty surrounding the Brexit.
–Reuters contributed to this report