US dollar slumps against strengthening yen

Published: 8 Aug at 9 AM Tags: Euro, Dollar,

The US dollar has dropped to its lowest level against the yen in seven weeks amid concerns that the greenback could be entering a new period of weakness. In just one month the dollar has lost four per cent as the yen hit a peak of 96.30.

The Australian dollar remains vulnerable as analysts concentrate on Australian jobs data and trade data due to be released by China. A policy meeting at the Bank of Japan is expected to result in a continuation of economic stimulus.

The euro has also fallen against the yen to hit a one-month low of 128.39. However, sterling has rallied on the back of expectations that the Bank of England could begin to push up interest rates. Although Governor Mark Carney previously said any rise in interest rates would depend on unemployment in the UK falling to seven per cent, recent positive data indicates this could happen sooner than expected. The pound is currently trading at $1.5490.

In China there are hopes that trade figures will have improved after stumbling in June. If the figures are not positive the Aussie dollar will suffer along with other commodity currencies.

Weak job figures will also make it more likely that the Australian central bank could announce rate cuts.