The US Dollar edged higher against the Japanese Yen as investors dismiss the recent rout in Chinese equities and as speculation grows that the U.S. could soon see a rise in interest rates. Yesterday, the Japanese Yen had been pushed higher after stocks in Shanghai fell nearly 8.5%, the largest single day’s fall in 8 years. FX traders still deem the Yen as a safe haven currency, despite the possibility of an intervention by the Bank of Japan. Though Chinese equities continued to slide today, it was at a more moderate pace and the flight from risk ebbed as a result.
As reported at 11:24 am (BDT) in London, the USD/JPY pair was trading at 123.7470 Yen, a gain of 0.40%. On Monday, the pair traded at a session trough of 123.01 Yen, and today’s trading band has 123.0700 Yen at the low end and 123.8100 Yen at the top.
UK GDP Lifts Sterling
In the UK, the Pound Sterling is getting some marginal support. Earlier the UK Office of National Statistics released preliminary UK GDP figures for Q2, which met analysts’ expectations exactly with a slight rise to 0.7% (quarter-over-quarter) and a drop to 2.6% (year-over-year). The GBP/USD pair was higher at $1.5599, a rise of 0.25% while GBP/JPY was higher at 193.03 Yen, a gain of 0.65%. The Bank of England is also weighing the possibility of a rate hike in the near future.
