Title: Dollar Edges Lower, Yen on Rise After Abe Shooting
Jul 08, 2022 02:56AM ET
The US dollar edged lower in early European trade on Friday, while the safe-haven Japanese yen was in strong demand following the firing of former Japanese Prime Minister Shinzo Abe.
At 02:55 AM ET (0655 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 106.895, remaining near a 20-year high.
USD/JPY fell 0.3 per cent to 135.63 as currency traders traded the Japanese currency, which is notoriously risk-averse, after news that Abe, Japan's longest-serving prime minister, was shot dead on Friday while campaigning for the general election. Abe was reported to be in serious condition.
Japan holds upper house elections on Sunday and traders have been concerned about the impact of a possible change in political support for the central bank, although any impact on the market is likely to be temporary.
Attention will turn later in the session to the release of the latest monthly US labour market report, which is expected to show that the number of American workers rose slightly in June, although not as much as the number of new jobs created in May.
EUR/USD traded unchanged at 1.0159, remaining near a two-decade low, as investors fear a Russian-triggered energy crisis could plunge the continent into recession.
European Central Bank chief Christine Lagarde will address the risks to the global economy later in the session. The speech will be closely analysed for clues to the central bank's thinking as it is expected to raise interest rates later this month but growth in the region appears to be slowing.
GBP/USD fell 0.2% to 1.2002, giving back some of Thursday's gains after Prime Minister Boris Johnson resigned, ending uncertainty over his future. While the move could end the recent political paralysis, the country is still struggling with the difficulties associated with rampant inflation, rising interest rates and slowing growth.
USD/HUF fell 0.2% to 395.31, while the forint continued to gain after Hungary's National Bank raised its benchmark one-week deposit rate by 200 basis points to 9.75% on Thursday, the highest in a decade.
USD/PLN traded broadly unchanged at 4.7065 after Poland's central bank raised rates by 50 basis points on Thursday. This was the tenth consecutive rate hike, but still less than the expected 75 basis point increase.