3 Minutes to Read TOKYO, Japan (Reuters) – On Wednesday, the euro stumbled near a three-month low against the dollar as poor German data cast doubt on the economy’s health, while the dollar awaited the Federal Reserve’s minutes from its most recent policy meeting. FILE PHOTO: A Korea Exchange Bank employee counts one hundred US dollar bills during a photo opportunity on April 28, 2010 at the bank’s headquarters in Seoul. Jo Yong-Hak/File Photo/REUTERS The euro was trading at $1.1820 after hitting a three-month low of $1.1806 on Tuesday. It plummeted to 130.81 yen against the yen, pushing closer to a two-month low of 130.05 established on June 21. The ZEW economic research center revealed that investor sentiment in Germany, the euro zone’s largest economy, declined dramatically in July, but it remained quite strong. Separate statistics revealed that orders for German-made goods fell sharply in May for the first time since the first lockout in 2020, owing to decreased demand from nations outside the euro zone. Oil prices dropped sharply after OPEC producers called off a meeting because major parties couldn’t agree on how to raise supply. Other risk-sensitive currencies took a knock as a result. [O/R] The Australian dollar was trading at $0.7490, reversing gains achieved on Tuesday when the Reserve Bank of Australia announced the first move toward reducing its stimulus program. The Reserve Bank of Australia (RBA) announced a third wave of quantitative easing, albeit at a smaller scale than the previous two rounds, while keeping the April 2024 bond for its three-year rate objective of 0.1 percent. The yen rose to 110.645 yen per dollar on cautious risk sentiment, extending its recovery from a 15-month low of 111.64 hit last week. The yen’s gains came as US bond yields fell to their lowest levels since February, following data showing the service sector expanded at a slower pace. In recent weeks, yields have fallen as many speculators who wagered that increasing inflation would cause the Federal Reserve to tighten policy soon were forced to exit their bets. However, minutes from the Fed’s June policy meeting, which are coming later on Wednesday, could provide new insight into the central bank’s policy outlook. “Many people believe the Fed will hint at tapering in August, then state in September that it is being examined, with implementation in December. However, I believe the Fed could act sooner than those dates suggest “Sumitomo Mitsui Bank’s senior strategist, Daisuke Uno, stated. “The essential point is that the Fed’s inflation prediction has already been raised.” Cryptocurrencies were in a holding pattern elsewhere, with bitcoin at $34,066 and ether at $2,308. Hideyuki Sano contributed reporting, and Shri Navaratnam edited the piece./n
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