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Forex - Yen gains in Asia as Brexit polls drive safe-haven demand

Published 06/14/2016, 06:57 PM
Updated 06/14/2016, 07:02 PM
Yen gains on Brexit turmoil
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Investing.com - The yen ticked higher in early Asia on Wednesday on continued safe-haven demand while the pound trended weaker with attention focused on the tone of the latest Federal Reserve statement on policy today and opinion polls ahead of a vote on U.K. membership in the European Union.

USD/JPY changed hands at 106.03, down 0.08%, while GBP/USD traded at 1.4110, down 0.03%. AUD/USD traded at 0.7350, down 0.12% and NZD/USD traded at 0.6985, down 0.13%.

In New Zealand, the first quarter current account came in at a surplus of NZ$1.31 billion quarter-on-quarter, wider than the NZ$1.05 billion level seen. The year-on-year figures showed a deficit of NZ$7.50 billion, compared to an expected deficit of NZ$7.48 billion.

Ahead, the Westpac consumer sentiment index for June is due with a previous reading of 8.5%.

The Federal Reserve will conclude its two-day June monetary policy meeting, with a closely-watched interest rate decision on Wednesday afternoon.

While the Federal Open Market Committee (FOMC) is not expected to raise short-term interest rates at the meeting, Fed chair Janet Yellen could provide clues on whether the U.S. central bank could lift rates before the end of the fall. The FOMC has left the target range of its benchmark Federal Funds Rate steady at a level between 0.25 and 0.50% at each of its first three meetings this year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 95.03.

Investors also continued to closely monitor poll results in the U.K., which increasingly show a British public shifting their support to the "Leave," campaign, ahead of next week's controversial Brexit referendum.

Overnight, the dollar held onto gains against the other major currencies on Tuesday, as the release of upbeat U.S. retail sales data boosted optimism over the strength of the economy and as investors eyed the Federal Reserve’s monthly policy meeting due to begin later in the day.

The U.S. Commerce Department said that retail sales increased by 0.5% last month, compared to the forecast for a rise of 0.3%. Retail sales for April rose 1.3%. Core retail sales, which exclude automobile sales, increased by 0.4% in May, in line with forecasts. Core sales in April gained 0.8%.

Markets have pushed back expectations on the timing of the next rate hike by the U.S. central bank after a dismal U.S. employment report for May, which showed the slowest rate of jobs growth since September 2010.

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