FX round-up: Yen weakens to seven-year low versus the US dollar
US dollar strength propelled it to seven-year highs versus the Japanese currency unit ahead of the release of a second reading on first quarter gross domestic product growth in the States.
Dollar/yen gained 0.69% to 123.72.
Said data will arrive alongside the latest readings on Japanese consumer prices, household spending and consumer prices.
“We have witnessed signs of continued weakness in Japanese private consumption, which accounts for some 60% of GDP,” Brenda Kelly, head analyst at London Capital Group wrote in a research note e-mailed to clients.
“This remains a key issue for the Bank of Japan as the economic recovery remains fragile following a recession last year and, while many would expect the central bank to embark on even more aggressive tactics to spur growth, there is a chance that rising wages and increased purchasing power from lower oil prices will boost household spending.”
Increased risk appetite was probably also a factor after reports broke in the afternoon that Greece and its international creditors might be closer to an agreement to relieve the country’s distressed finances.
Euro/dollar edged higher by 0.17% to 1.0902.
Cable slipped 0.28% to reach 1.5351.