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What's going on with dollar and yen after the Fed meeting

What's going on with dollar and yen after the Fed meeting

Jim Anderson - Public Relations

During today's Asian trading, the dollar is getting cheaper against the euro and other world currencies at the decision of the Federal Reserve System (FRS) to lower the interest rate.

At the same time, the yen is growing after the Central Bank of Japan refrained from changing monetary policy. As of 7:22 London time, the euro was worth $ 1.1044 against $ 1.1030 at the close of the last session.

The value of the single European currency against the Japanese national currency was at the same time 119.25 yen compared to 119.62 yen on Wednesday. For the dollar, at 7:22 London time, they were giving 107.97 yen against 108.45 yen on the eve.

The ICE Dollar Index, which shows the value of the US dollar against six major world currencies, is down by 0.14%. WSJ Dollar indicator against 16 major world currencies, is losing 0.06%. Yesterday, the Federal Reserve expectedly lowered the federal funds rate by 0.25 percentage point, to 1.75-2%.

Also, the Central Bank management published updated macroeconomic forecasts. In particular, the forecast for US GDP growth for 2019 was improved to 2.2% from the expected 2.1% in June, and by 2021 to 1.9% from 1.8%. The forecast for 2020 is left at 2%.

Meanwhile, the Bank of Japan today didn’t begin to change the basic parameters of the monetary policy (MCP), although it called for a review of economic and price changes in October. As expected, the bank left the target yield on 10-year government bonds of Japan at about zero, the interest rate on deposits of commercial banks in the Central Bank at minus 0.1%.

At the same time, the leadership of the Japanese Central Bank noted a slowdown in the growth of foreign economies and the associated risks, which encourages it to pay closer attention to the possibility of losing momentum to achieve a target inflation rate of 2%. “Given this situation, the bank will review changes in the economy and prices at the next meeting when it updates the forecast of economic activity and prices”, the Bank of Japan said in a statement.