As investors bet on additional monetary easing amid pressure from President Donald Trump to lower interest rates, the U.S. dollar was poised for its biggest weekly decline in four months on Thursday.
A hawkish shift in tone from Bank of Japan officials contributed to the yen’s 0.10% increase to 156.33 per dollar. Due to Thanksgiving, U.S. markets are closed, reducing liquidity and intensifying trade activity.
According to Francesco Pesole, a forex strategist at ING, “that could be an appealing environment for Japanese authorities to intervene in dollar/yen.
But following a dollar-negative data event, there might still be a desire to go in, and the pair’s stall might have lessened the sense of urgency,” he continued.
As the appeal of the US dollar wanes, Mark Haefele, chief investment officer at UBS Global Wealth Management, advised clients to reevaluate their currency allocations and favor the euro and Australian dollar over the US dollar.
Investors predicted that the appointment of White House economic adviser Kevin Hassett, a proponent of rate cuts, as the next chair of the Federal Reserve would be detrimental to the dollar.Themos Fiotakis, global head of currency strategy at Barclays, stated, “We’ve gone through a period where rate differentials and euro growth expectations clearly benefited Europe over the U.S.
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