Yen declines after a small reminder from the Bank of Japan. The regulators will follow the example of their colleagues and take measures to stop inflating its balance sheet this year.
The yen buyers sharply expanded on aggressive policy expectations from the Japanese Central Bank which cut asset purchases by 5%: USD/JPY slid 0.3%, EUR/JPY suffered moderate losses against the background of an intensifying selloff of the European currency.
Data on unemployment could not inspire bulls to buy more Euro: the key figure fell to 8.7%, justifying the market forecast, and the share of unemployed among youth was 18.2%. The immunity of the European currency to labour market data is explained by the absence of a visible effect on inflation, which on the contrary fell from 1.5% to 1.4% last month. Nevertheless, economic growth in the Euro area is felt through the growth of export orders, i. external demand, as well as improving leading indicators, such as economic sentiment in the corporate environment.
EUR/USD has developed a downward trend, the pair is approaching the level of 1.19 after it failed to break the key psychological mark at the beginning of the new year, which could become a hindrance for further growth. In addition, active selloff can be linked to the upcoming ECB meeting, where Mario Draghi can again refer to the need to maintain soft credit conditions until clear signals are issued on the inflation front.
Dollar won almost againts all major opponents on Tuesday, after the release of an important economic indicator on Monday – the volume of issued consumer loans. Credit indicators are significant data on which, at the moment of recovery, you can judge consumer confidence, as well as the prospects for inflation. The key indicator rose to $27.95 billion in November, exceeding the previous month’s figure by $ 6 billion. In percentage terms, the growth is far from impressive, but one can expect stronger inflation data than anticipated.
The Dollar Index reached the level of 92.30 during today’s session. Nevertheless, the technical picture indicates a short-term bullish correction after falling to the level of 91.50. The previous time, the Dollar reached similar values in September 2017.