Dollar edges up vs. yen while risk-sensitive currencies held firm
- The dollar edged up slightly against the yen while risk-sensitive currencies held firm on Thursday
- Traders have remained optimistic after the US and China struck an initial trade agreement earlier this month.
- The trade optimism is expected to continue underpinning risk assets.
On Thursday, the dollar edged up against the yen. At the same time, risk-sensitive currencies remained optimistic about easing the US-China trade tensions and a pick up in global economic growth.
The dollar traded at 109.53 against the yen- 0.2% higher and within striking distance of a six-month high of 109.73 touched earlier this month.
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The euro barely moved at $1.10905.
The Aussie was firm at $0.6927, a shade below its four-month peak of $0.6939 touched earlier this month.
The kiwi traded at $0.6648, near its highest level in five months.
Global currency markets remained in a holiday mood after Christmas Day on Wednesday, with several centers still closed for Boxing Day on Thursday.
Traders’ confidence stays intact
Traders have remained optimistic after the US and China struck an initial trade agreement earlier this month. The optimism is expected to continue underpinning risk assets.
Stronger appetite in currency markets usually translates to more selling in safe-haven currencies such as the yen against other currencies leveraged more to growth such as the Aussie.
“While global share prices have been rallying, the currency market has seen limited reaction so far, but I think currencies will have a catch-up to do,” said Koichi Kobayashi.
Koichi Kobayashi is the chief manager of forex at Mitsubishi UFJ Trust Bank.
China says it’s in close touch with the US and the trade deal signing ceremony after the US President Trump said on Tuesday that he and his Chinese counterpart – Xi Jinping would have a ceremony to sign the recently struck trade deal.
The offshore yuan strengthened slightly to 6.9895 yuan per dollar, up about 0.09%.
Elsewhere, GBP traded at $1.2996, up slightly from its levels before Christmas holidays though still way below its Dec. 13 peak of $1.3516.