The USD is trading steeply higher against the Japanese Yen today after the Bank of Japan disclosed its monetary policy decision today. The greenback is up by almost 1.60% against the Yen, breaching one-month high, at 120.73. The strength in the dollar came after the Bank of Japan surprised the markets through its recent negative interest rate policy.
BOJ’s surprise move
The pair’s support is at 118.53 and resistance at 121.55. The BOJ concluded its Friday meet announcing a negative interest rate of 0.1%. The Bank added that it could further cut the policy rates if required. The move reflects the efforts of the Bank to achieve its 2% inflation goal amid the global uncertainties and unstable oil prices. Moreover, the decision is aimed at discouraging the consumers from forming a deflation mindset.
The dollar continues to trade higher than other major currencies as investors are awaiting the U.S. fourth-quarter growth data to come in later today. EUR/USD pared its earlier day gains and were trading substantially lower than the greenback. The pair is trading 0.35% lower at 1.0902 after recording most of the gains yesterday on account of vague Federal Reserve commentary.
Russian Ruble up
The Federal Reserve had left policy rates unchanged yesterday, stating that the growth in the U.S. is moderate and encouraging for a gradual rate increase. A slew of other reports was also published yesterday.
Meanwhile, the U.S. dollar traded lower than the Russian Ruble, down by 0.77% to 75.839. The Ruble gained momentum after reports emerged that the Russian authorities are willing to open a dialogue with OPEC members over oil production cut. The outlook for the Russian economy improved following such reports, which was seen to be edging towards the financial crisis.
On the other hand, GBP/USD traded flat against the dollar at 1.4358 after the U.K. Office for National Statistics reported a 0.5% growth in its fourth quarter gross domestic product, which came in line with the forecasts.
Elsewhere in China, the People’s Bank of China fixed the Yuan rate against the U.S. dollar at 6.5516, higher than the Thursday’s fixing.