By Alun John
HONG KONG, June 21 (Reuters) – The Australian greenback edged up a fraction after remarks from the central financial institution governor pointing to more price hikes down beneath, however fears of slowing world development capped features, whereas the Japanese yen retested a 24-year low.
More broadly, traders in foreign money markets stay closely centered on central financial institution motion globally and the prospect of aggressive rate of interest rises.
The Aussie was 0.26% increased at $0.6954, extending the day gone by’s small features, after Reserve Bank of Australia (RBA) Governor Philip Lowe signalled lots more coverage tightening forward.
RBA minutes from its June assembly, at which the central financial institution raised charges by a bigger than anticipated 50 foundation factors, highlighted the central financial institution’s considerations about inflation.
However, analysts mentioned the long run trajectory of the foreign money can be pushed more by the worldwide development outlook, which didn’t look optimistic for the Aussie.
“I feel the larger driver for the Aussie can be world components moderately than native influences, and we are actually forecasting the U.S. greenback to extend this yr based mostly on our expectation for a pointy slowdown. We suppose the Aussie will push to 65 U.S. cents by the tip of this yr,” mentioned Carol Kong, an FX strategist at Commonwealth Bank of Australia.
Elsewhere the Japanese yen remained beneath strain at 135.1 yen per greenback, not far off a 24-year low of 135.58 yen hit early final week, after the Bank of Japan on Friday dashed any delicate expectations of a change in coverage and renewed its dedication to ultra-easy financial settings.
The euro was little modified at $1.0516, as Monday’s remarks from European Central Bank President Christine Lagarde about the necessity to nip the chance of monetary fragmentation between euro nations within the bud, eclipsed the adverse drag of French President Emmanuel Macron dropping his parliamentary majority.
Broadly increased danger sentiment throughout markets, with U.S. fairness futures up over 1%, additionally supported the Aussie and the euro.
The greenback index, which tracks the dollar in opposition to six main friends, was a contact decrease at 104.38.
The main occasion for the greenback this week is Federal Reserve Chair Jerome Powell’s semi-annual two-day report back to Congress, which kicks off on Wednesday.
Two different Fed policymakers are resulting from make public remarks afterward Tuesday, as effectively as two audio system from the Bank of England, with merchants watching their remarks intently for clues concerning the rate of interest trajectory.
Sterling was at $1.227, climbing from final week’s over two-year low of $1.1934.
Bitcoin was at $20,500 having failed to interrupt strongly above or under the psychologically important $20,000 degree in current days.
(Reporting by Alun John Editing by Shri Navaratnam and Sam Holmes)