Article by ForexTime
Wall Street posted its biggest one-day gain in four years on Wednesday and this boost in risk appetite flowed into the Asian markets on Thursday. As a result, remand for safe havens like the yen decline.
This helped lift the dollar/yen. Investors reacted by unwinding recent moves that lifted both the yen and euro.
However, comments from New York Fed’s William Dudley last night may not help the dollar rise to much. He said an interest rate hike next month seemed less appropriate given the threat posed to the U.S. economy by recent market turmoil.
USD/JPY hit an Asian session high of 120.35, recovering from a seven-month low of 116.15 reached on Monday.
EUR/USD slid as far as 1.1290, moving further away from a seven-month peak of 1.1715 set early in the week.
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Also weighing on the euro were remarks by European Central Bank’s chief economist Praet who said the risk has increased that the ECB won’t get inflation back up to where it wants, and that he would consider taking further action could be taken if necessary (such as QE).
GBP/USD which suffered its biggest one-day fall in five months on Wednesday. It slid 1.4 percent to its lowest in nearly three weeks to 1.5451. The pair traded a high of 1.5507 in Asia today.
Commodity currencies had a less dramatic session but their failure to rebound on the back of improved risk appetite suggested there was still a degree of market caution. AUD/USD rose from Wednesday’s low of 0.7068 to reach 0.7151.
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