Dollar recovers against the yen

Published: 13 Aug at 9 AM Tags: Euro, Dollar,

The dollar was up on Monday as expectations that economic data to be released this week will be strong enough to encourage the Federal Reserve to rein in its stimulus programme in the near future. Retail figures due to be released today are expected to be positive.

Although the dollar was driven higher earlier in the year on the back of expectations across the board that the Fed would bring an early end to its massive bond-buying strategy, the currency has suffered in recent weeks as investors began to doubt that economic data, including jobs figures, was sufficiently strong enough for the central bank to consider a policy adjustment.

The greenback could be given added support this week as the European Central Bank is expected to keep interest rates low. Currency analysts are expecting the rest of August to remain quiet, but disappointing GDP figures from the eurozone could put some pressure on the single currency.

Weaker than anticipated economic data coming out of Japan is having a negative effect on Japanese stocks. This could lead to more investment in the safe-haven yen. The dollar is currently worth 96.80 yen, an increase of 0.6 per cent following an earlier dip.

The euro is down 0.29 per cent to $1.3303 following reports that Greece could be looking for further economic support by the beginning of next year.