Japanese Yen flattens against US Dollar while Fed’s policy takes centre stage
The Japanese Yen (JPY) trades flat against the US Dollar (USD) at around 163.75 during the Asian trading session on Tuesday. The USD/JPY pair struggles for direction as investors have sidelined ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades marginally lower to near 101.46.
According to the CME FedWatch tool, traders see a 62% chance that the Fed will leave interest rates unchanged in the range of 3.50%-3.75%. The tool also shows a strong possibility of an interest rate hike in the September policy meeting.
Investors should not expect any guidance on the interest rate outlook in the monetary policy statement and Chairman Kevin Warsh’s press conference, as he clarified in the last meeting that “so-called forward guidance is not well-suited in the current policy juncture”.
Market participants would like to know for how long the United States (US) inflation will stay above the central bank’s 2% target.
On the Tokyo front, investors also await the Bank of Japan (BoJ) monetary policy announcement on Friday. The BoJ is expected to leave interest rates unchanged at 1% and deliver hawkish remarks on the monetary policy outlook.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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