By TraderVox.com
Tradervox.com (Dublin) – The US and Japanese currencies advanced against most of their peers after Japan reduced its economic assessment and data from German is expected to show worsening consumer sentiments. These reports have added to speculation of global economic slowdown, spurring safety demand. Further, dollar advances were supported by speculation of improving consumer sentiments and regional manufacturing in the US. The rise also came as Fed Chairman Ben S. Bernanke prepares to talk in Jackson Hole, Wyoming on August 31. The New Zealand dollar decreased against its peers after Fonterra Cooperative Group Ltd reduced its payout forecast.
According to Callum Henderson, Head of Currency Research in Singapore at Standard Chartered Plc, the global economic backdrop remains weak, forming his view of a relatively strong dollar as the yen remains stronger against the euro. His comments came after the Japan government downgraded its forecast for the first time in ten months. In announcing the decision, a Cabinet Office report indicated that it considered the risks such as slowing down of overseas economies and the sharp fluctuations being experienced in capital and financial markets. In addition, a GFK report for German Consumer Index is expected to decline to 5.8 in September from 5.9 recorded this month.
The Japanese currency advanced by 0.4 percent to 98.02 yen per euro during midday trading in Tokyo today while it added 0.3 percent against the dollar. The US dollar appreciated by 0.1 percent against the euro to trade at $1.2481 per euro.
This advance come in midst of positive reports expected from the US, with the Federal Bank of Richmond expected to say the region’s factory index rose to minus 10 this month from a minus 17 registered last month. Another report on US consumer confidence is expected to rise to 66 in August from 65.9 in July. This will be the highest the index has been since April. The positive reports from the US are expected to keep the dollar in demand as safety demand increases.
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