The Japanese Yen made strong gains during Tuesday’s Asian and European trade after the news that oil prices had fallen again sent FX investors in search of a safe haven. With risk appetite waning, commodity linked currencies such as the Australian and Canadian dollars were both under pressure as a result. At the same time, the U.S. Dollar’s rally paused as U.S. Federal Reserve officials made some cautionary comments which had investors rethinking the timing of the next interest rate hike.
As reported at 8:28 am (GMT) in London, the USD/JPY was trading at 119.78 Yen, a loss of 0.8% for the greenback, with the pair moving farther away from Monday’s 7-year peak at 121.86 Yen. The EUR/JPY was trading at 147.93 Yen, a loss of 0.5% for the common currency. The AUD/USD hit a 4-year trough at $0.8223 while the USD/CAD is trading at C$1.1501.
Fed Comments Put an End to Dollar Rally
In the U.S., Denis Lockhart, the president of the Atlanta branch of the Federal Reserve Bank, said yesterday that the Fed’s pledge to maintain rates at their existing low was likely for a “considerable time.” The president of the San Francisco branch of the Fed, John Williams, agreed with Lockhart’s assessment of the Fed’s position.