The USD/JPY currency pair is positioned to record its first monthly decline since September 2016 if the US dollar does not recover by the end of today. The US dollar is on a major downslide following controversial policies implemented by President Donald Trump barely ten days after he assumed office.
The currency pair has lost almost 100 pips earlier today causing the US Dollar Index, which tracks the greenback’s performance, to hit 99.36, its lowest level since November 14. The lower than expected figures for the employment cost index, the Chicago PMI, and the consumer confidence index measured by the Conference Board.
The weakening of the US dollar was largely triggered by Donald Trump’s policies and the weak US economic data released today. The US dollar is likely to recover later in the day and may recoup most of its loses against the yen and other major currencies.
Trump’s protectionist policies coupled with the negative economic data released triggered a massive selling of the US dollar amid negative market sentiment towards the greenback.
The currency pair is likely to be affected by the Federal Open Market Committee‘s 2-day meeting, which is currently ongoing, and might result in the Fed announcing an interest rate hike tomorrow.
The USD/JPY currency pair was trading at 113.11 as at 17:41 GMT having tested lows of 112.05 earlier in the day, which indicates that the currency pair is recovering. The EUR/USD was trading at 1.0779 having tested highs of 1.0809 earlier, which indicates that the US dollar is on a recovery path.
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