Forex Asia Review – Yen falls on prospects of BOJ policy easing

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Euro consolidated gains made after rallying against the dollar in the US session yesterday. The pair traded a range in Asia ahead of the US Fed policy meeting today. The FOMC is due to release its policy statement and announce interest rates and growth prospects for the US economy. Speculation is that rates will remain ultra low. This will maintain a weaker dollar. EURUSD traded between 1.3190 and 1.3205.

 

Looking ahead, Germany will be holding a bond auction later today. Also, European Central Bank President Mario Draghi will testify before the European Parliament’s Economic and Monetary Committee, in Brussels later.

 

GBPUSD remained near a six-month high,  range-bound between 1.6134 and 1.6148. The pound is buoyed by speculation that the Bank of England will not expand QE at its next meeting. Focus turns to tomorrow’s UK GDP data.

 

Yen weakened against most of its major counterparts on speculation that the Bank of Japan will extend stimulus measures and ease policy at its meeting on Friday. USDJPY extended gains into Asia, rising to a high of 81.41, while EURJPY rose to 107.64.

 

The Australian dollar rebounded to claw back some losses from yesterday’s sharp fall. The upbeat market sentiment in Asia helped lift the aussie. There were no economic data from Australia due to markets being closed there today for a holiday. AUDUSD rose to 1.0337, up 0.8 percent since yesterday’s low.