© Reuters.
Investing.com – The US dollar rose in early European trade on Friday, but is still on track for a monthly loss, while the Japanese yen slipped after the Bank of Japan largely maintained its dovish stance.
At 02:55 ET (06:55 GMT), the greenback, which measures the greenback against a basket of six other currencies, was trading 0.2% higher at 101.415, rebounding from a nearly two-week low seen in earlier this week.
However, the US currency remained on track for a monthly loss of just under 1%, after slumping around 2.3% in March, as traders worried about the health of the US banking system and the prospect of the Federal Reserve ending its aggressive monetary tightening. With the country’s economic growth faltering.
The latest example of a US slowdown came with the release of first-quarter growth data on Thursday. Real growth in the world’s largest economy rose at an annual rate of 1.1% during the January-March period, slowing from 2.6% in the last three. months 2022.
Next is March, which is the central bank’s preferred measure of inflation, which may influence the Fed’s interest rate decision.
It is widely expected to raise interest rates another quarter of a percentage point next week and then pause for more hikes in June.
Elsewhere, it rose 1% to 135.29, with the yen hit hard after Bank of Japan Governor Kazuo Ueda initially decided to keep ultra-easy monetary policy unchanged, without making any changes to the yield curve control policy.
The central bank rescinded its pledge to keep interest rates at “current or lower levels” and said it would “conduct a comprehensive review of monetary policy”, but the news still disappointed those who were looking forward to an immediate change in policy.
It rose to 1.1029, staying close to a one-year high, with the euro on track for a monthly gain of more than 1.5%.
Data from Germany’s most populous state, released earlier on Friday, showed that consumer inflation remained elevated in April, rising 6.8% year-on-year.
There are also inflation figures from other German states as well later in the session, as well as the first quarter release from the Eurozone.
A rate hike is widely expected next week, but policymakers are likely to remain hawkish as the European economy shows signs of recovery and inflation remains an issue.
It fell 0.1% to 1.2481, it fell 0.4% to 0.6606, while it fell 0.1% to 6.9163, with the Chinese yuan recovering slightly from its lowest level in more than a month recorded earlier in the week.