FOREX-Yen, Swiss franc slip as Brexit worries ease

June 15, 2016
By


* Fed meeting eyed for cues on rate hike stance

* Dollar/yen edges up as recently battered stocks rebound

* Brexit worries to keep most investors cautious

(Updates prices, adds comments)

By Gertrude Chavez-Dreyfuss

NEW YORK, June 15 The safe-haven yen and Swiss
franc lost some ground on Wednesday as concerns over Britain’s
referendum on its EU membership eased, while the dollar slipped
before a Federal Reserve monetary policy decision due later in
the day.

The U.S. central bank concludes a two-day Federal Open
Market Committee meeting later on Wednesday, with Fed Chair
Janet Yellen expected to strike a balanced tone, keeping rate
hikes in the coming months in play but possibly flagging
“Brexit” risks as well.

“No doubt Ms. Yellen and company will make references to the
current turbulence caused by the Brexit vote as part of the
reason for their cautious approach,” said Boris Schlossberg,
managing director of FX strategy at BK Asset Management in New
York.

“But if they look past this event and suggest that the U.S.
economy continues to expand at a healthy pace, the market
expectations for a Fed hike in July may increase markedly
especially if next month’s NFPs (non-farm payrolls) show a
rebound in jobs.”

A poll gave Britain’s “Remain” camp a marginal lead ahead of
the June 23 referendum on whether to remain in the European
Union or leave, although the issue is almost certain to keep
markets cautious up to the last minute.

The rebound in risk appetite helped European stocks snap a
five-day losing streak and gave China’s stock market its biggest
gains in two weeks despite MSCI deciding not to add mainland
shares to one of its benchmark indexes.

In morning trading, the euro edged up 0.1 percent against
the yen to 119.02. Sterling also gained versus the
yen, rising 0.3 percent to 150.17 yen, while the
Australian dollar rose 0.5 percent to 78.44 yen.

The safe-haven Swiss franc did no better than the yen,
sliding 0.2 percent against euro to the 1.0812 francs.
The currency pair had fallen to a near six-month low, when
worries about a Brexit and its impact on the euro zone economy
drove investors to the relative safety of the Swiss currency and
Japan’s yen.

The BOJ, meanwhile, will announce its policy decision on
Thursday, with a recent spike in the yen adding to headaches for
policymakers. While most in the market expect an easing in July,
some traders said the sharp yen gains could force the central
bank’s hand this week.

The euro edged up to $1.1350 after weakening on
Tuesday to an 11-day low of $1.1189.

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Anirban Nag in London; Editing by Meredith Mazzilli)

Comments are closed.

Forex Quotes