The stability of the dollar against global currencies, support the expectations of the two-day BOJ meeting, scheduled for October 6-7.
MOSCOW, 6 Oct. Dollar gains against global currencies on Tuesday amid stronger investor demand for riskier assets, due to lower expectations for a rate hike in the U.S., according to AFP.
As of 7.46 GMT the dollar index (the dollar against a basket of currencies of six major U.S. trading partners) has been strengthened by 0.02% to 96.1 points. The dollar the yen rose and 120.5 yen per dollar with 120,46 yen per dollar at the previous closing. The Euro-dollar exchange rate fell to 1,1182 1,1189 of the dollar from the dollar to the Euro.
Weak statistics on the U.S. labor market has convinced many investors that the Federal reserve system (FRS) will delay the first rise in interest rates in 2016. The unemployment rate in the country in September was 5.1%; the number of jobs in nonagricultural sectors of the economy grew by 142 thousand. Analysts had expected the number of jobs will increase by 200 thousand.
“The way the market looks at the statistics for the number of jobs in the U.S., is a sufficient factor to reduce the likelihood of a rate hike, but it is not enough to indicate a significant weakening of the economy”, — quotes Agency France Presse words of the chief foreign exchange strategist at RBC Capital Markets Adam Cole (Adam Cole).
In addition, the stability of the dollar against global currencies, support the expectations of the two-day BOJ meeting, scheduled for October 6-7. According to some market participants, the regulator may declare the meeting about additional easing of its monetary policy. In their forecasts they refer to recent data suggesting that the economy may have returned to recession.
“Expectations of fed rate hike has decreased, stocks, and commodities showed a recovery, which resulted in a decrease in risk aversion”, — says chief economist at Sumitomo Mitsui Banking, Atsuko Yamashita (Yamashita Etsuko). According to experts, this development lays the basis for further possible easing.