Dollar Rises After BoJ's Kuroda Talks Down Yen; ZEW, U.K. Jobs Data Eyed
The dollar was broadly flat against the euro and sterling in early trade in Europe Tuesday but rose against the yen after Bank of Japan Governor Haruhiko Kuroda said he was willing to take action to stop the currency rising too far.
At 03:00 AM ET (0800 GMT), the dollar was at 110.75 yen, up from an earlier low of 110.45.
Answering questions from lawmakers, Kuroda said the BoJ would ramp up stimulus if a sharp rise in the yen hurt the economy and made it harder to reach the bank’s 2% inflation target. The yen strengthened sharply at the end of last year as the collapse in risk appetite led traders to unwind carry trades funded in the Japanese currency. It had spent most of 2019 giving up those gains until turning up after last week’s shockingly weak U.S. economic data. In Europe, the euro has continued its rise back above $1.13 in early trading ahead of a flood of data over the next few days that will show whether the slowdown has bottomed out or is getting worse. Tuesday’s data calendar is dominated by the German ZEW sentiment index, due at 5:00 AM ET (10:00 GMT).
The dollar index, which measures the greenback against a basket of currencies, weakened as the euro rose, and was at 96.672 by 3:40 AM ET (8:40 GMT).