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The dollar experienced modest appreciation against the euro on Thursday, supported by progress in U.S. trade discussions with key partners. However, its performance against the yen was mixed due to a stronger yen. The rise of the yen is attributed to expectations for possible interest rate hikes and assurances from the Japanese central bank that a U.S. trade agreement would ease economic uncertainty.
Market analysts anticipate challenges for the yen due to Japan’s upcoming upper house election, with potential political upheavals expected. Meanwhile, the European Union is set to confirm a broad 15% tariff on its goods, aligning with analysts’ predictions. Attention has now turned to the upcoming European Central Bank policy meeting.
In economic data, France showed vulnerability amid budget cut talks, while Germany reported marginal growth. Despite current calm in hard economic statistics, experts like Mohit Kumar from Jefferies warn that the impact of trade tariffs could emerge in the coming months. Nonetheless, risk assets surged, reflecting relief from fears of a global trade war-induced economic downturn.
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What factor contributed to the mixed performance of the dollar against the yen?
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