The dollar fell to an 8-month low against the Japanese yen in Asia this morning as dovish comments by a US Federal Reserve official overnight made investors speculate upcoming US economic indicators will come in weak.
The comment came from St. Louis, Missouri, Federal Reserve President James Bullard who said that the US is closer today to a Japanese-style deflationary period than ever in US history. He continued by adding that buying more Treasurys would be one option to help stave off the threat. The comments fueled recently prevailing views that the world’s largest economy is losing its growth momentum at a faster pace than analysts had expected.
The University of Michigan (UoM) will release a monthly consumer sentiment survey at 13:55 GMT today. A Dow Jones poll of economists expects the headline index will deteriorate to 67.2 in July from 76.0 in June. If the data misses the consensus, US share prices and Treasury yields will decline, which would push the greenback down to as low as 85.00 against the yen.
Forex Market Analysis provided by Forex Yard.
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