Steady dollar sends yen to the brink of 160
dollar was firm on Wednesday and trading on the precipice of the 160 yen barrier as investors turned cautious and counted down to the release of U.S. price data at the end of the week.
The euro eased marginally overnight and was steady at $1.0708 in Asia trade. At 159.71 per dollar, the yen's level has markets on alert since that is only a whisker shy of where Japanese authorities likely stepped in to buy yen in April.
A surprise jump in Canadian inflation that showed up in data released on Tuesday also injected some nerves into otherwise placid foreign exchange trade, sending the Canadian dollar briefly spiking to a three-week high.
«The May (data shows) that monetary policy's normalisation is likely to prove protracted and eventually result in a return to near neutral policy, not an expansionary setting,» Westpac senior economist Pat Bustamante said in a note to clients.
Markets are banking that Friday's U.S. data shows annual growth in the Federal Reserve's favoured core personal consumption expenditure index slowed to 2.6% in May, the lowest in more than three years and opening the way to rate cuts.
Policymakers, however, continue to signal they are in no rush, with Fed Governors Lisa Cook and particularly Michelle Bowman stressing that decisions will depend on data.
«Inflation in the U.S. remains elevated, and I still see a number of upside inflation risks that affect my outlook,» Bowman said.
The Australian dollar dipped 0.1% to $0.6640 and the New Zealand dollar similarly slipped to $0.6115, with small
