Following Fed Chair Powell’s statements, the US dollar is under pressure.
The drop in US yields is weighing on the USD/JPY, which is ending a three-day winning streak.
After the start of the American session and into the London fix, the USD/JPY fell even more, reaching 109.95, its lowest level since last Friday.
USD/JPY is currently trading at 111.10, down 50 pips on the day. The pair was driven to the negative by a lower US dollar, which was influenced by Fed Chairman Powell’s comments. He stated that the labor market had a “far way to go.” Inflation, he predicted, will likely continue high in the following months.
Market traders interpreted Powell’s statement as “dovish.” The yield curve in the United States has shifted to the downside, while stocks have risen sharply. Wall Street indices have been moving off highs in recent hours, adding to the yen’s support.
The DXY is declining after increasing for two days in a row and is now below 92.50. The 10-year yield fell to 1.36 percent, a weekly low after reaching a weekly high on Tuesday.
The dollar rose across the board on Tuesday, bolstered by better-than-expected inflation figures. On Wednesday, the PPI index likewise beat expectations, but Powell’s remarks tainted the results./n
