THE dollar advanced yesterday, following two straight sessions of slight declines, while the yen held near a four-decade low, as investors continued to watch for signs of possible intervention by Japanese authorities to support the currency.
The dollar index, which measures the greenback against a basket of currencies, gained 0.12 per cent to 100.98, with the euro down 0.11pc at $1.1426.
Federal Reserve Bank of New York President John Williams said in a television interview yesterday that he has grown a little less worried about the state of price pressures in the economy due to the recent retreat in energy prices, which he expects to continue.
Meanwhile, European Central Bank Governing Council member and Bank of Italy Governor Fabio Panetta said the outlook for the euro zone economy remains fragile, and called for monetary policy decisions to be tested against a range of scenarios given the major shifts in the global economy.
The Japanese yen strengthened 0.08pc against the greenback to 161.95 per dollar, after touching 161.66, though it remained not far from a 162.83 trough hit last week. The yen found some support late last week as traders grew wary of a possible shift in Japan’s intervention strategy, though they said the currency’s sudden jump on Thursday was not indicative of official action.
Investors will eye the minutes from the Federal Reserve’s June meeting, the first under new Chairman Kevin Warsh and scheduled for release today, for policymakers’ views on forward guidance from the central bank.
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