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Forex - USD/JPY steady amid Fed, ECB uncertainty

Published 09/05/2012, 03:11 AM
Updated 09/05/2012, 03:11 AM

Investing.com - The U.S. dollar was steady against the yen on Wednesday, as expectations for fresh stimulus measures by the Federal Reserve weighed on the greenback, while uncertainty over the European Central Bank’s next policy decisions supported demand for the safe haven yen.

USD/JPY hit 78.37 during early European trade, the daily low; the pair subsequently consolidated at 78.40, dipping 0.05%.

The pair was likely to find support at 78.15, the low of August 13 and resistance at 78.65, the high of August 8.

The greenback remained under pressure after disappointing U.S. manufacturing data on Tuesday added to speculation that the Fed may soon announce a fresh round of easing measures to shore up growth.

Fed Chairman Ben Bernanke indicated last week that the central bank will act as needed to strengthen the U.S. economic recovery.

Meanwhile, investors eyed the ECB’s monetary policy meeting on Thursday, amid expectations that the bank will give further the details on a long awaited bond-buying program designed to help ease funding pressures for indebted euro zone countries.

ECB President Mario Draghi told European lawmakers on Monday that purchases of short-term sovereign bonds to help debt-burdened countries like Spain and Italy would not breach European Union rules.

Market sentiment remained vulnerable however, amid growing fears that the central bank may disappoint.

The yen was higher against the euro with EUR/JPY shedding 0.29%, to hit 98.28.

Later in the day the U.S. was to produce revised data on nonfarm productivity.


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