Article by ForexTime
The yen retreated from the strongest in four weeks against the dollar as the greenback strengthened in Asia on Wednesday, with a rebound in Tokyo shares providing one of the few cues on a day of thin trading.
USD/JPY was at 116.91 yen from 116.61 yen late Tuesday in New York. The market may be more reluctant to sell the dollar-yen now than it may have been yesterday, as investors look ahead to the FOMC meeting today.
Tumbling oil prices have been jolting global financial markets, with a worsening in investor sentiment translating into a falloff in riskier assets such as stocks and a shift into safe haven assets such as the Japanese yen. The dollar temporarily touched ¥115.56 overnight–its lowest level since Nov. 17.
Oil prices continued to soften Wednesday, with February Brent crude futures on London’s ICE Futures exchange trading $0.76 lower at $59.25 a barrel after Russia said it would maintain its current level of oil production next year.
The ruble remains in focus after it lost as much as 19 percent yesterday in the biggest one-day drop in 16 years. Russia’s central bank unexpectedly raised its key interest rate to 17 percent from 10.5 percent, the largest increase since 1998, when rates soared past 100 percent and the government defaulted on debt. The ruble declined to a record low of 80.10 per dollar on Tuesday.
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