On Tuesday, February 13, the US dollar keeps drifting downwards touching a 5-month bottom in the pair with the Japanese yen on stabilization of the global stock markets. However, investors are still careful given upcoming US inflation report this week.
Stock markets in Asia have posted an upturn today following the US ones over the last session. The market has been highly volatile last weeks given possible earlier interest rate increase on higher inflation.
The yen traditionally enjoys good demand when the market is unstable considering the support from the high trade balance surplus in Japan, which involves better stability against currencies of the countries facing a deficit.
However, investors still stick to the careful policy in light of coming release of US inflation report. As a result, safe haven demand for the yen has slackened. The new selloffs can happen if the data exceeds expectations.
The US Dollar index dropped to some 86.70.
The euro to US dollar rate increased to 1.2324, after posting the bottom at 1.2204 a week ago. The European currency remains backed by the anticipated delayed launch of stimulus measures by the European Central Bank amid a robust economic upturn in the euro-area.
The sterling has also rebounded vs the greenback reaching some 1.3859 today. The sterling is still in the demand given expectations about a possible upward revision of the interested rate by the BoE soon though the Brexit process remains vague.