Dollar keeps more mixed on the session thus far

The dollar is keeping steadier and a little firmer against the major currencies bloc but only with one exception again. And that is against the Japanese yen. Falling Treasury yields in response to the US CPI report yesterday drove USD/JPY lower but also as traders look to be stepping up expectations for a BOJ rate hike next week.

The pair fell to a low of 155.20 in Asia and is now trading around 155.81, though still down 0.4% on the day. This comes as the odds of a 25 bps rate hike by the BOJ for next week are now at ~79%. For some context, it was more or less a coin flip less than a week ago.

There hasn’t been any new developments to the BOJ narrative but recent remarks by policymakers indicate that they are keeping their options open. Ueda’s comments today is quite a change from what we saw from him last month here.

It doesn’t take away what he said from last month, as they could still not hike rates next week. But they aren’t as adamant as wanting to kick the can down the road to March as compared to his December remarks at least.

Besides that, the dollar is keeping steadier with EUR/USD tightly wound near 1.0300 still. The pair is hugging levels around 1.0285-95 for the most part so far in European morning trade. Then, GBP/USD is staying heavier as it dips back under 1.2200 for a bit – down 0.4% on the day.

Elsewhere, USD/CAD is up 0.2% to 1.4370 and AUD/USD down 0.2% to 0.6210 currently.

It’s on to the US retail sales and weekly jobless claims data next to offer something up.

This article was written by Justin Low at www.forexlive.com.