BRUSSELS, Sept 14 — The euro touched a two-week high and traders slashed bets on a weaker yen to the least since April amid speculation monetary policy will remain unchanged in Japan and the US in coming days.
The dollar fell against most major peers last week as a report showing flat US producer prices left traders doubting the Federal Reserve will increase interest rates this month for the first time since 2006 this week.
US consumer prices probably dropped in August, a September 16 report is forecast to show.
The Bank of Japan will maintain its policy stance at a meeting today, according to all but two of 35 analysts polled by Bloomberg.
“It’s hard to justify that a US rate hike is the right move at this time,” said Derek Mumford, director at Rochford Capital in Sydney.
“There could be some squaring of positions prior to the decision and keep the US dollar certainly from going higher.”
The euro was little changed at US$1.1347 (RM4.886) as of 9:38am in Tokyo after reaching US$1.1359, the most since Aug. 27. It advanced 0.1 per cent to 136.91 yen. The yen was at 120.67 per dollar from 120.59 on Friday.
The BOJ will expand easing on Oct. 30, according to 11 economists in the Bloomberg survey taken from September 7-10. Of the total respondents, 13 said they don’t expect any stimulus at all.
Yen shorts
Hedge funds and other large speculators trimmed bets on yen weakness versus the dollar for a fourth straight period. The difference in the number of wagers on a drop compared with those on a gain -- net shorts-- was 6,662 on September 8, from 15,555 a week earlier, according to data from the Washington-based Commodity Futures Trading Commission.
The yen has climbed 6.1 per cent in the past three months, the most among its peers in Bloomberg Correlation-Weighted Indexes, as equity markets fell and concern deepened about slowing global growth. The euro is up 4.4 per cent while the dollar has climbed 3.6 per cent.
The US consumer price index fell 0.1 per cent in August after a 0.1 per cent gain the month before, economists surveyed by Bloomberg forecast a Labor Department report to show Wednesday. That would be the first negative reading since January. — Bloomberg
