While the Asian market suffered a depreciation of the US Dollar, most of the focus was on the Japanese Yen and the British pound. The British pound somehow managed to get itself off the rails after falling heavily during the previous session. On the other hand, the Japanese ruling party is about to vote for their newest leader. And it is assumed that this leader would be replacing the incumbent Prime Minister Shinzo Abe.
The US Dollar Index, which is in charge of tracking the greenback and comparing it with other monetary currencies displayed an edging down of 0.16% to 93.192- which resulted in it rolling over towards the contract of December. Most of the American investors would be waiting for the policy meeting of the U.S. Federal Reserve- which has been shifted to Wednesday. The investors are hoping that there would be plans for a further easing of monetary transactions. On the other hand, some investors are taking the more cautionary approach and warning others of setting too high expectations.
The bank strategists from Standard Chartered mentioned how the FOMC did not seem to have any operational consensus with regards to the usage of the balance sheet. This comes as an addition to them already setting aside a yield curve control- something of a policy option for the near-term.
The Brexit Turmoil, and How It Will Affect the US Dollar
The other centralized banks like the Bank of England, and the Bank of Japan will be announcing their own policy decisions on this Thursday. Fortunately, the GBP/USD pair had been on a rise of 0.22% to 1.2821- despite raging fears that the exit from the European Union without any recent trade deals would definitely put intense pressure on the Pound. Last week, news came from the capital that the government could very well be planning to digress from the international law- which was naturally met with widespread backlash from not just the President of the EU, but also from erstwhile Prime Ministers of the country. John Major, and Tony Blair mentioned that Britain simply had to let go of their shocking plan that was due to legislation breaking its treaty of divorce with the Union- something that was in breach of the international laws.
The Japanese Elections That Will Influence the US Dollar in the Coming Weeks
On the other hand, the JPY/USD couple edged down 0.04% to 106.09 before the Liberal Democratic Party voted for their newest leader. Yoshihide Suga, the Chief Cabinet Secretary is the one who is in favor of winning the vote- and being declared as the successor to Shinze Abe for the Prime Ministership.
The Australian- US Dollar pair edged down 0.03% to 0.7281, whereas the New Zealand- US Dollar edged up 0.46% to 0.6694.
Minori Uchida of the MUFG Bank mentioned that although Suga would be continuing Abe’s brand of dynamic politics, it was doubtful how much further he would actually take this ‘Abenomics’ in Japan. But his policies will surely be quite important to the development of the US Dollar.