Market News
May 13, 2013 @ 7:49 am

US Dollar maintains strength, yen slides

Major currency pairs were little changed since Friday, with lack of key data in early Monday trading and no reaction to the G7 meeting that was held over the weekend.

Yen was the only major mover, weakening further against the US dollar since the G7 failed to criticise Japan on its current bold monetary easing policies, and essentially giving its seal of “approval”.

This led to another yen sell off as investors feared the currency will slide further in coming months as the Bank of Japan implements more monetary easing in its bid to fight deflation and stimulate the fledgling Japanese economy.

USDJPY broke above a key 102 level for the first time in four years before steadying around 101.60.

The euro was trading close to one-month lows against the broadly stronger dollar as the improving US economic outlook fuelled speculation that the Federal Reserve may taper its quantitative easing program.

EURUSD fell to an Asian session low of $1.2959 before subsequently consolidating at $1.2974.

The dollar maintained strength against most of its major counterparts today after a sharp rally on Friday amidst strong US jobs data raised hope over an earlier-than-expected end to the Fed’s monetary stimulus program which pumps $85 billion a month into the American economy.

Data on Thursday propelled the dollar higher as US initial jobless claims fell to the lowest level since January 2008 in the week ending May 4.

Other jobs data earlier this month showed that the US economy created more jobs than forecast in April, pushing the unemployment rate to a more than four-year low of 7.5 percent.

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