Dollar Struggles At 100 Yen Level, Focus Is Now On Fomc - Fxnet Analysis

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Focus is on the FOMC minutes that are due later this evening, which will be a key driver of the US dollar. During the European session the dollar was mixed, as markets digested yesterday’s comments by Federal Reserve President Ben Bernanke who reiterated the Fed’s continued stimulus program was here to stay.

The euro was flat against the dollar on minor news flow today, but eased off the Asian session highs of $1.3576 to fall to the $1.3520 area where it steadied. German PPI unexpectedly fell today by 0.2% month-over-month.

Sterling remained strong after the Bank of England minutes which showed no surprises and had an upbeat assessment of the UK economy, particularly with respect to economic growth during the second half of the year. GBPUSD climbed as high as $1.6160.

The yen was steadier in the European session as USDJPY struggled to break sustainably above the key level of 100 yen, but traded well within yesterday’s range. Earlier in the Asian session the yen was weighed down by data showing widening Japan’s trade deficit.

EURJPY hit a four-year high of 135.93 as a result of this data, but eased down to the 135 yen level in the European session.

The Australian dollar was weak on a deteriorating fiscal outlook as well as due to global growth concerns. AUDUSD fell to $0.9364. Focus will turn to RBA Governor Stevens who speaks on Thursday at 4:05am EST.