USD to Yen Dips, As Japanese Currency, Grows Stronger With The Kiwi

The dollar dipped against the yen early on Tuesday, shedding of 0.2% to 100.120. The USD to Yen (JPYUSD) exchange rate drop occurred amid a pullback in Tokyo stocks. On the other hand, the New Zealand dollar (NZDUSD) rose 0.6% at $0.7312 after the Reserve Bank of New Zealand Governor, Graeme Wheeler, noted that the existing interest rate track included further monetary easing but did not see the need for a rapid series of rate cuts.

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The greenback had risen to about 101.00 yen overnight following a comment by Federal Reserve Vice Chair, Stanely Fischer, though it later lost steam. The Euro recorded a 0.1% increase to $1.1332 from an initial overnight low of $1.1271.

Views expressed by various Fed officials over the past week have impacted the dollar, especially USD to Yen. A wait and see mood has been embraced by many, ahead of a possibly decisive speech by Fed Chair Janet Yellen, on Friday.

Within the immediate future, the market is looking for catalysts from the Eurozone and U.S. purchasing index data and U.S. home sales numbers due later in the session. So far, the data from Europe has been relatively healthy. Officials continue to believe that the impact of Brexit will be limited, as its implementation looks more and more delayed to as far as late 2019, according to a report in The Sunday Times.

Kiwi rise

The kiwi recorded a 15-month high of $0.7351 mid-month. It had proven resilient to falling cash rates at home especially given that they had remained far higher relative to those of other developed economies. Governor Wheeler had noted in a speech that the New Zealand central bank remained committed to inflation goals in the Policy Target Agreement and believes the outlook and balance of risk warrants neither a position of no policy change nor a position of rapid easing.

The RBNZ had earlier cut interest rates by 25 basis point to a record low of 2.0%. The Australian dollar was up 0.2% at $0.7642 moving up on the coattails of Kiwi.

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