The dollar was largely flat in Europe early Friday, maintaining the week’s gains on a safe haven bid amid rising Covid-19 cases worldwide. USD/JPY rose 0.1% to 109.98 after the Bank of Japan kept its interest rates unchanged at a policy meeting, while cutting its forecast for the current fiscal year’s growth to 3.8% from April’s 4.0% forecast. Rising Covid-19 cases, mainly in southeast Asia, but also in Europe and the U.S., have turned many traders risk averse, to the benefit of the dollar.
The dollar is largely unchanged in early European trade Tuesday, with traders adopting a cautious stance ahead of the release of the latest U.S. inflation data which could influence the Federal Reserve’s monetary policy. The surprise shift in tone by the Federal Reserve last month, in bringing forward expectations of the first interest rate hike to 2023, has helped the dollar in recent weeks. This change was based on the U.S. economic recovery proceeding more quickly than previously expected, including a sharp rise in consumer inflation.
By Gina Lee