Forex Market Review – Yen maintains strength after BOJ

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Euro recovered slightly from a two-year low reached earlier against the dollar, under pressure by heightened risk aversion amid concerns of slowing global growth. China releases GDP data tomorrow, with current forecasts for a decline in the world’s second largest economy.  Data are expected to show growth slowed to 7.6 percent in the second quarter, the worst performance since the 2008-2009 financial crisis.

Meanwhile markets were disappointed that the FOMC minutes yesterday did not signal more stimulus measures in the world’s largest economy, despite sluggish growth in the U.S.

EURUSD touched a two-year low of 1.2166 before recovering some losses by bouncing to 1.2210 on profit taking in the New York trading session.

GBPUSD extended losses going in to the U.S. session, falling to a one-month low of 1.5392 then paring losses climbing to 1.5438. Sterling dropped sharply after U.S. jobless claims data boosted the  dollar.

USDCHF rose 1 percent from Wednesday to hit a 1-1/2 year high of 0.9868 today. The pair eased slightly in the U.S. session to 0.9832.

Yen made large gains today after the BOJ kept its asset purchase program unchanged and did not ease monetary  policy further. This was positive for the Japanese currency, which has also gained due to its safe haven status. USDJPY consolidated losses hovering between 79.16 and 79.34. Dollar failed to make significant gains after U.S. data showed the number of Americans claiming jobless benefits last week fell to a four-year low.