The USD/JPY currency pair today declined significantly after the release of the University of Michigan preliminary consumer confidence index, which indicated that the headline index had beat expectations. Despite the strong data from the US, the US dollar continued to perform poorly against the Japanese yen for the better part of the day.
The US Dollar demonstrated mixed results against most of its main peers such as the British pound and the euro, yet it was significantly weaker against the Japanese yen.
The greenback’s poor performance today was largely due to the dovish tone adopted by the Federal Reserve on Wednesday after the FOMC implemented a rate hike. The US dollar has performed poorly since then, while the Japanese yen was stronger today after the Bank of Japan maintained its negative interest rates, but outlined a hawkish economic outlook.
The University of Michigan data indicated that the preliminary Confidence Index for March was at 97.6 versus the expected 97.0. However, the preliminary annual inflation expectations for March were at a low of 2.4% as compared to February’s 27.0%.
The currency pair’s performance is likely to be affected by the resolutions passed at the G20 meeting of finance ministers, which was officially launched today. Some of the key topics up for discussion include currency manipulation, populism and protectionism.
The USD/JPY was trading at 112.68 as at 17:55 GMT having opened the day’s session trading at a high of 113.46. The GBP/USD was trading at 1.2393 having opened the day’s session trading at 1.2355 and hit a daily high of 1.2399.
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