Dollar, Yen, Loan Prime Rate, and Bank of China in Market

Against the Japanese yen, the dollar last traded a tad stronger at 109.31. Against the Euro, the dollar is a tiny bit weaker at $1.1116. This week’s dollar has gained 0.7% on the yen.

The last 24 hours’ best performer was the Australian dollar. The Australian dollar rallied half a percent because stable jobs data prompted traders to pare back bets on a cut of interest rate when the central bank meets in February.

Forecasts that the Australian Reserve Bank will reduce rates fell from about 60% to just under even.

Sean Callow, Westpac FX analyst, said that it is a notable change. When the expectations fall under 50%, the psychology changes a little bit also. People are not entirely convinced, added Callow, who is sticking with a forecast for a cut.

The Australian dollar was the last steady near a one-week high at $0.6883. In a week where another round of positive economic data offset weakness in milk prices, the New Zealand dollar was stable at $0.6607.

Dollar and Others

China is unveiling new tariff exemptions on U.S. oil and chemical product imports. It supports optimism about the China-U.S. trade détente. The Chinese yuan held just on the better side of the symbolic 7-per-dollar.

Markets widely expect further monetary cuts in 2020 to fight an economic slowdown. On Friday, China kept its lending benchmark unchanged.

The five-year LPR (loan prime rate) also remained the same at 4.80%. From the previous monthly fixing, the one-year loan top rate was unchanged at 4.15%.

The People’s Bank of China lowered rates on 14-day reverse repurchase agreements to ease monetary conditions on Wednesday.

The index of the dollar rose slightly to 97.440. Robust housings and firmer-than-expected manufacturing data start this week to halt two weeks of declines against the basket of currencies. In most places, the dollar found strong support.

There is very little probability from the U.S. Fed to move interest rates anywhere when it meets in January.