SINGAPORE, (APP/AFP): The dollar retreated across the board
in Asia Thursday after comments from Federal Reserve boss Janet Yellen on the weak global economy suggested the central bank will not hike interest rates any time soon.
The greenback also sank to late 2014 levels against the yen on the
back of a flight to safe investments as markets from Asia to the Americas are buffeted by worries over the global outlook.
Testifying before Congress on Wednesday, Yellen made no explicit comments on the Fed’s rate plans but her warning that the US economy faced headwinds from overseas weakness was interpreted as a signal that no increase was in the offing in the immediate future.
In New York the dollar fell to 113.40 yen from 115.14 yen the day before.
On Thursday it fell further, to 112.58 yen — its weakest rate since
November 2014 after the Bank of Japan’s surprise decision to ramp up its vast bond-buying scheme, effectively printing cash, to boost its economy.
The euro rose to $1.1291 from $1.1286 but it eased to 127.40 yen from
127.99 yen.
Fed policymakers in December raised interest rates for the first time in more than nine years and there had been speculation that further lifts would follow this year. But the turmoil that has ravaged markets since the start of January has thrown a spanner inthe works.
“The financial markets are absolutely convinced that the US Federal Reserve will not meet their hike cycle projections this year because market volatility and a rather soft patch of US data lately raised the risk of further rate tightening,” said Bernard Aw, market strategist at IG Markets Singapore.