TOKYO/LONDON (Reuters) – The dollar advanced against the euro and pound after comments from a Federal Reserve advisor that the U.S. central bank had no urgency to cut rates.
Meanwhile, the market is preparing for key economic data on US inflation and tends not to make decisions on the yen for fear of intervention by the Japanese authorities.
At around 10.15am the Japanese currency was stuck at 151.46 against the dollar, after having reached its lowest level since 1990 at 152 yesterday, before top Japanese monetary officials suggested they were ready to intervene to avoid further declines.
The euro lost 0.45% to 1.0779 dollars, a five-week low, and the pound lost 0.4% to 1.2587 dollars. The dollar index gained 0.32% to 104.685, its highest level since mid-February.
Market expectations about the first Fed rate cut in June have moderated slightly. According to FedWatch, current prices indicate a probability of 60% from 67% last week.
If inflation data were to surprise on the upside and support the dollar, the biggest impact could be on the yen. According to traders, the 152 level would trigger options, accelerating the devaluation of the Japanese currency.
(Translated by Laura Contemori, editing Alessia Pé)
