Yen May Rise on Weaker Risk Appetite, US Dollar Falls Before FOMC
- NZ Dollar down as risk appetite sours in Asian trade
- US Dollar pressured ahead of FOMC policy decision
- Yen may rise as market sentiment continues to sour
The New Zealand Dollar underperformed in otherwise quiet overnight trade. The decline played out alongside a drop in Japan’s benchmark Nikkei 225 stock index as well as S&P 500 futures, pointing to fading risk appetite as the source of pressure on the sentiment-geared currency.
The US Dollar likewise suffered, pulling back after touching a three-week high last week, as the focus turns to a much-anticipated FOMC monetary policy announcement. Markets are all but certain that a rate hike is in the cards but the accompanying forecast update and commentary may stoke significant volatility.
Looking ahead, a lull in top-tier economic news flow seems likely to keep sentiment trends in the spotlight. Futures tracking major European and US equity benchmarks are broadly in the red, hinting that higher-yielding FX is vulnerable while the anti-risk Japanese Yen may build some upward momentum.
Retail traders expected US Dollar strength. Find out here what that hints about the price trend!
** All times listed in GMT. See the full DailyFX economic calendar here.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.