The yen weakened against most major counterparts today on low safe haven demand as investor confidence has been bolstered by improved US economic data.
Despite expectations of the Federal Reserve reducing monetary stimulus, market sentiment is holding up well and equity markets are up, especially in Asia today, which led to a yen sell-off.
The yen slid to its lowest level in seven weeks against the dollar in the Asian session and dropped to 99.64 per dollar, the weakest since September 20. It fell 0.3 percent to 133.34 per euro. The dollar rose 0.1 percent to $1.3393 per euro. The pound struggled to stay above the key $1.60 handle and declined to touch a session low of $1.5950.
The British pound will be in focus this week as there are many key risk events that will be the main driver for the currency. Today we have UK CPI. The Bank of England Inflation report will be closely watched this week as well as the UK employment report.
The BOE’s “growth forecast is likely to be revised higher and a faster decline in unemployment is likely to be anticipated”. In this case this will be positive for the pound.