By Tom Westbrook and Ama Mi Yamamitsu
SINGAPORE / TOKYO (Reuters) – Investors’ sentiment remained stable on Tuesday as investors weighed on a favorable turn from the European Central Bank to the euro this weekend, while the pound lost ground due to Brexit uncertainty.
After a day of thin holiday trading, the greenback was slightly stronger against the currency () at 93.1.15 and the euro () at 1.1809 dollars.
The move was modest in Asian days, but the dollar returned to soft pressure as risk appetite returned to equity markets. [MKTS/GLOB]
.Australian Dollar Ler
The main focus this week is on the European Central Bank’s policy decision on Thursday.
Most analysts are not expecting a change in the central bank’s policy stance but are paying attention to the message about the inflation forecast and whether it seems concerned about the strength of the euro.
The single currency will meet earlier this month after hitting a two-year high of 20 1.20, until comments by ECB chief economist Philip Lane about its level put it down.
Commonwealth Bank Australia v Australia Australia (OTC 🙂 currency analyst Kim Mundy said, “The ECB may raise more concerns over the appreciation of the euro and make some lower changes to its inflation estimates.”
“In our view, the dollar could rise further for the rest of the week as the ECB is likely to take a more sharp turn.”
Elsewhere, in the midst of quick election talks, Daler trades strongly against the Japanese yen – something that Yoshihid Suga, the next to lead Shinzo Abe to success in next week’s leadership vote – hints in a newspaper interview.
Analysts say many currency market participants no longer regard the leadership race as a catalyst, as the next leader is likely to follow Abe’s policy path.
“About eight years ago (when Abe took office), the yen was strong at around 70 per dollar. But with the current dollar / yen level, there is nothing the subsequent currency can do wisely,” said Daisuke Karakma, chief market strategist. Said. At Mizuho Bank.
He said a strong equity market should be more worrying instead.
Yen
British pound
A report in the Financial Times suggested that Britain could legislate to override its Brexit withdrawal agreement, warning the European Union that there would be no deal if that happened, and raising the prospect of a tough Brexit again.
New talks are set to begin in London on Tuesday.
The pound traded 0.2% lower at 1.3146 after falling 0.8% overnight, and sat a fraction at a two-week low of 89.76 pence () against the euro.
Some traders also sold sterling against the yen (), which last traded at 1.6.ed33, after hitting a two-week low of hit..5..8 in the previous session.
The key question for the markets is whether this comment is still as fast as negotiations near the finish line, said Tapas Strickland, NAB’s director of economics. “The lighter market reaction suggests that markets think so and still sniff the deal.”
Meanwhile, data from Australia showed that the month-on-month easing of employment eased to August 22, when last month’s business confidence rose but remained fragile.
Japan’s economy contracted 28.1% year-on-year in April-June, worse than the initial estimate of a contraction of 27.8%, the revised figures from the Cabinet Office showed on Tuesday.
Day after day the final European GDP figures are pending.