Currency markets were relatively quiet ahead of a speech from Janet Yellen later in the day, the Federal Reserve chair. In recent days, there have been growing expectations the US central bank could hike interest rates sooner than expected, by June.
Last week, Fed rate hike expectations were given a boost following the release of hawkish FOMC minutes and several Fed speakers supporting a lift in rates. This week investors have been somewhat more cautious, with the dollar retreating 0.2 per cent this week in anticipation of Yellen’s speech today.
The dollar index, a measure of the US currency against a basket of global peers, was flat during Asian trading this morning.
Economic data this morning showed Japan’s headline consumer price index fell 0.3 per cent year-on-year in April, down from -0.1 per cent in March. Core inflation, which strips out fresh food prices and is what the Bank of Japan is trying to push to 2 per cent, fell 0.3 per cent last month, steady on the -0.3 per cent drop in the previous month.
The yen strengthened briefly following the data, but has since drifted to be 0.1 per cent lower at ¥109.90 per dollar.
Brent crude, the international benchmark, traded lower today, down 0.5 per cent at $49.33, while West Texas Intermediate was also down as much at $49.22. On Thursday, Brent pushed through $50 a barrel for the first time since November. The next OPEC meeting on June 2 in Vienna, Austria will be in focus.