By TraderVox.com
Tradervox.com (Dublin) – There is a upsurge in demand for riskier assets in the market as speculation that central banks around the world are making efforts to spur growth in their respective economies. This has led to the weakening of safe haven currencies such as the US dollar and the yen. The yen has dropped the most against most of its peers as investors scramble for riskier assets.
According to the Bank of Tokyo-Mitsubishi UFJ Ltd, the US job data expected to be released may add to the case of Federal Reserve adding stimulus to spur growth in the US economy which has faltered according to the recent data. The Dollar Index fluctuation has been associated to the expected results of the job data. Further, economists are also projecting a rate cut by the European Central Bank which meets tomorrow. According to Adrian Schmidt of Lloyds Banking Group Plc, economists are expecting the ECB to lower interest rates and the Bank of England to engage in more quantitative easing or large-scale buying of assets.
The European Central Bank and the Bank of England will publish their policy decisions tomorrow. The ECB officials are set to announce a reduction in interest rate to 0.75 percent while the deposit rate will be set at zero. Market analysts have also suggested that the Bank of England will announce quantitative easing measures as the Governor of the BOE had voted to add stimulus in their last meeting. The Fed is expected to add stimulus through quantitative easing as poor employment figures continue to show signs of economic slowdown. Nonfarm payrolls due on Friday July 6 will is expected to show a drop.
The Japanese currency dropped by 0.7 percent against the euro to trade at 100.72 yen per euro yesterday during the New York trading session. The yen also dropped by 0.4 percent against the US dollar to trade at 79.79 but the greenback fell against the euro by 0.4 percent to trade at $1.2622.
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