Market News

With safe haven demand rising, the U.S. Dollar Index remained close to a 2-week peak as geopolitical tensions in the Ukraine escalate with Russia implying that they were militarily ready to intervene if necessary, an implication that the U.S. warned would be considered a “grave mistake.”

The Japanese Yen steadied during the Asian trading session today as FX players shunned the greenback in the wake of falling treasury yields as a result of unexpectedly bleak economic data from the United States.

The U.S. Dollar firmed versus its major peers during Tuesday’s Asian trading session even as FX traders await further evidence that the economic recovery remains on track and reaffirms that the Federal Reserve’s decision to taper is the appropriate one.

The Euro steadied versus its main rival, the U.S. Dollar, after experiencing volatility during the unrest in the Ukraine which eventually saw the president removed from office and a transformation of the government.

Better than expected labor data which showed that fewer Americans had filed for unemployment relief last week helped to lift the U.S. Dollar as investors consider that the way forward for the Federal Reserve’s tapering plans are more certain.

Demand for the safe haven Japanese Yen increased following the latest economic release out of China which showed that the preliminary factory output in February contracted for the second consecutive month, leaving investors wary that the emerging markets may be on a downward trend.

The Pound Sterling was lower against its main rival, the common currency Euro following the release off a report which showed that inflation in the U.K. fell below the target set forth by the Bank of England.

The Japanese Yen was broadly lower as the Bank of Japan (BOJ) maintained existing monetary policy which calls for continued easing as necessary in order to devalue the Yen if it proves to be appreciating to the detriment of the Japanese economy.

Last week’s unexpectedly disappointing economic data points pushed the U.S. Dollar Index to a 6-week trough and saw the greenback falling broadly in individual trading in Asia.

The U.S. Dollar and the Index which tracks its performance both continue to be under pressure, this time the combined results of unexpectedly poor retail sales data and a rise in unemployment claims.

An unexpected and disappointing labor report from Australia helped to send the Aussie dollar sharply lower and resurrected investor speculation that the Reserve Bank of Australia might now be considering an interest rate cut to help stabilize the Australian economy.

An improvement in recently released trade data from China helped to boost the Australian Dollar to a 1-month peak against its U.S. counterpart.

The U.S. Dollar Index edged lower and held closet to a 2-week trough as investors await the new head of the Federal Reserve Bank’s testimony to glean, perhaps, the future of Quantitative Easing under her rein and the resultant direction of the greenback.

In Monday morning trade, the Japanese Yen held close to its recently struck troughs versus both the Euro and the U.S. Dollar which followed last Friday’s Wall Street rally.

With the ECB decision now out of the way, FX players are waiting only for the U.S. release of private sector jobs growth for the month of January.