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Afternoon Sees Slight Dominance of Dollar Buying
USDJPY Erases Morning Decline.
“Afternoon Witnesses Moderate Dollar Buying Dominance as USD/JPY Recovers from Morning Decline”
During the afternoon session, the USD/JPY currency pair advanced to approximately 144.60. The dollar’s ongoing appreciation can be attributed to the persistent hawkish sentiments expressed by Powell, the Chairman of the Federal Reserve Board (FRB), in the foreign markets the previous day. This surge propelled the dollar to reach a noteworthy height of around 144.62, marking its strongest performance in approximately seven months since November of the preceding year. However, apprehensions regarding potential currency intervention by the Japanese government subdued market enthusiasm, resulting in a temporary setback, with the exchange rate briefly softening to approximately 144.14 during Tokyo’s morning trading session.
Nonetheless, the USD/JPY pair rebounded during the afternoon, effectively erasing its earlier decline and resuming its ascent to approximately 144.60. The prevailing demand for the dollar can be attributed to multiple factors, including the notable rise in the 10-year US Treasury bond yields and the after-hours trading gains witnessed in US stock index futures. Market participants eagerly await the remarks by Chairman Powell, scheduled to take place at 15:30 Japan time during an event organized by the Bank of Spain, as they anticipate potential insights that could further impact the market dynamics.
In contrast, the EUR/USD pair remained persistently weak throughout the session. It experienced an extended decline during the afternoon, reaching a level of approximately 1.0881. This represents the lowest point observed in nearly a week since the 23rd of the current month.
Similarly, the EUR/JPY pair temporarily softened during the morning session, hovering around 157.25. However, due to the declining performance of the EUR/USD pair, the subsequent rebound was sluggish in nature. During the afternoon, the pair traded within a narrow range near the day’s lowest levels.
Turning attention to the Australian dollar, it initially surged following the favorable retail sales data for May. However, as the session progressed, the Australian dollar stabilized, demonstrating a more subdued movement. The AUD/USD pair reached approximately 0.6627 in the morning but remained relatively stable, with minimal fluctuations, around 0.6610 during the afternoon session. Concurrently, the AUD/JPY pair underwent a phase of consolidation, maintaining a steady position around the mid-95 yen level.
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