- The USD/JPY goes back to about 144.50 while the US dollar yields the profits of the previous day waiting for US NFP data for April.
- The relaxation of commercial tensions between the US and China has increased appetite for the risk of investors.
- The Boja said that the monetary policy hardening plans have been influenced by Trump’s tariff policy.
The USD/JPY torque faces sales pressure after a three -day recovery movement around 146.00, and corrects about 144.50 during Friday’s European negotiation hours. The pair goes back as the US dollar index (DXY), which tracks the value of the dollar against six main currencies, yields the profits on Thursday and slides to about 99.65.
The US Dollar (USD) yields the profits of the previous day as investors are cautious waiting for the US non -agricultural payroll data (NFP) for April, which will be published at 12:30 GMT. Economic data is expected to have been severely impacted by the tariff agenda of US President Donald Trump.
Economists expect US employers to have hired 130,000 new workers, significantly less than the reading of March 228,000. The unemployment rate is planned stable at 4.2%. Cooling signals in labor market conditions would strengthen the market expectations that the Federal Reserve (FED) would begin to reduce interest rates from the June policy meeting.
Meanwhile, the feeling of the market has become favorable for risk assets with the hope of a decala in the commercial war between the US and China. The Chinese Ministry of Commerce indicated its willingness to sit at the table for commercial discussions with the US with the condition that conversations are based on “sincerity.”
Although the Japanese Yen (JPY) is upwards against the US dollar on Friday, his perspective has become uncertain since the Bank of Japan (BOJ) has indicated a delay in plans to increase interest rates even more against tariffs announced by President Trump. “We will enter a period in which both inflation and salary growth will probably slow down,” said the governor of the Boj, Kazuo Ueda, at the press conference, Reuters reported.
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
