USD/JPY lifted by Fed’s Bullard comments on rate hike

USD/JPY extended higher in Asia on Tuesday to hit a five-week high of 124.44. The dollar was boosted after a top Federal Reserve official added to expectations that U.S. interest rates could be raised as early as September. St. Louis Fed President James Bullard told the Fox Business network on Monday that the Fed is likely to raise rates in September as inflation is set to climb toward its target and unemployment is poised to dip below 5 percent

EUR/USD traded around 1.0827 after hitting a three-month trough of 1.0808 on Monday, slipping steadily after a debt deal that will keep Greece in the euro zone for the time being shifted investor focus back to diverging U.S. and European monetary policies.

GBP/USD remained weak after falling on Monday to a low of 1.5539 as investors awaited minutes from the Bank of England that are due on Wednesday. Markets are looking for hints on the timing of interest rate rises.

AUD/USD steadied just above six-year lows on Tuesday, as the Reserve Bank of Australia reiterated in its policy meeting minutes today its desire for a lower currency and that the recent fall in AUD had not gone far enough but offered little new guidance on the chance of another rate cut. AUD/USD fell to 0.7347.

Gold stabilized on Tuesday, holding just above a five-year low, but with investors still clinging to views of further price falls a day after the metal lost 4 percent. Spot gold was up 0.6 percent at $1,103.60 an ounce by 0318 GMT, after an early low of $1,096.65. The metal fell as far as $1,088.05 on Monday, its weakest since March 2010. Expectations of an increase in U.S. interest rates has been a key driver in gold’s descent along with sluggish demand in top consumers China and India. China disclosed on Friday a 57 percent increase in its gold reserves from 2009, far less than the market had estimated.

The post USD/JPY lifted by Fed’s Bullard comments on rate hike appeared first on Forex Circles.

Source:: USD/JPY lifted by Fed’s Bullard comments on rate hike

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