© Reuters. FILE PHOTO: The US dollar coins in this illustration were taken on July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By Ankur Banerjee
SINGAPORE (Reuters) – The dollar held steady on Monday after a strong US jobs report suggested the Federal Reserve could maintain its hawkish stance for longer, while the yen was hit by the news. believes that the Deputy Governor of the Bank of Japan Masayoshi Amamiya is said to be the next governor.
The newspaper reported, citing anonymous government and ruling party sources, that Prime Minister Fumio Kishida’s administration is in the final stages of deciding on a successor to incumbent governor Haruhiko Kuroda along with two vice-presidents. new governor.
During a press conference on Monday, Deputy Chief of the Cabinet Office Yoshihiko Isozaki said the Nikkei report was not true.
The yen weakened 0.42% to 131.75 to the dollar, having hit a three-week low of 132.60 earlier in the session.
“Amamiya has been helping Kuroda on monetary policy since 2013 and is widely seen as the most dovish among the candidates, which is dashing hopes that the BOJ’s policy normalization can progress under new director,” said Saxo Markets strategists.
The BOJ’s loose policy settings have drawn growing criticism from many sides, including opposition politicians and traders, for distorting market function.
Amamiya played a key role in drafting Kuroda’s asset purchase program in 2013 and has repeatedly called for extremely low interest rates. But he also said in July that the BOJ must “always” think about ways out of extremely loose monetary policy.
On Friday, the US Department of Labor’s closely watched jobs report showed nonfarm payrolls added 517,000 jobs last month. Economists in a Reuters poll had predicted a gain of 185,000.
The dollar edged higher and steady on Monday. Against a basket of currencies, the US currency hit a near 4-week high of 103.22 and was last at 103.03. The index was up 1.1% on Friday.
The Fed on Wednesday raised interest rates by 25 basis points and said it had made a turning point in its fight against inflation, prompting investors to price in a more dovish path going forward.
However, the staggering payrolls numbers coupled with a rebound in the US services sector in January led investors to question that the Fed was almost done with its monetary tightening.
“The worry is that the much better-than-expected data is bad news if the Fed sees this as consolidation,” said Tapas Strickland, head of market economics at National Australia Bank. chances of them raising it two more times and keeping rates high for longer.” OTC :).
Citi strategists say Fed Chairman Jerome Powell and the broader committee are increasingly excited about the possibility of a “soft landing” in which inflation eases despite a rebound in the labor market.
But Friday’s report, Citi said, will further concern the Fed that the labor market is too tight to match inflation targeting.
Traders are pricing the Fed’s policy rate to peak at 5.05% in June before the central bank cuts rates in the second half of the year.
Also boosting the safe-haven dollar was escalating tensions between the US and China after a US military fighter jet shot down a suspected Chinese spy balloon off the South coast. Carolina on Saturday.
The euro rose 0.02% to $1.0795. The European single currency fell 1% on Friday and hit a nearly three-week low of $1.07815 at the start of the session.
The last time, the pound took hold of $1.2057, up 0.05% on the day, after hitting a one-month low of $1.2031 earlier on Monday.
The Australian dollar rose 0.36% to $0.694, while the Australian dollar fell 0.08% to $0.633.
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Currency bid at 0521 GMT
RIC Description Last US Close Pct Change YTD Pct High Bid Low Bid
Previous change
Meeting
Euro/Dollar $1.0794 $1.0795 +0.01% +0.76% +1.0800 +1.0782
Dollar/Yen 131.7250 131.1050 +0.41% +0.31% +132,3700 +131.6100
Euro/Yen 142.20 141.59 +0.43% +1.35% +142,8200 +142,0000
Dollar/Swiss 0.9253 0.9260 -0.06% +0.09% +0.9284 +0.9254
British Pound/Dollar 1.2059 1.2049 +0.11% -0.26% +1.2062 +1.2031
USD/Canadian 1.3406 1.3400 +0.02% -1.08% +1.3419 +1.3400
Australian Dollar/Dollar 0.6936 0.6924 +0.19% +1.77% +0.6947 +0.6885
New Zealand 0.6325 0.6328 +0.01% -0.34% +0.6333 +0.6301
dollar/dollar
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Tokyo forex market information from BOJ
