What’s next? – USDJPY 01.11.17

The dollar exchanged at 113.76 against the Japanese yen in early hours on Wednesday, as the greenback regained some positions on the back of upbeat economic data.

The US dollar index, which gauges the greenback against six major rivals, was trading at 94.54 by the time of this writing, adding 0.12 percent.

The pair is currently affected by economic reports from Asia and the United States. Today, attention will be mainly directed to the Federal Reserve monetary policy meeting.

The Federal Open Market Committee will reveal its statement at 18:00, but there are no monetary policy changes expected. Interest rates are likely to stay between 1.00-1.25 percent.

According to Fed funds tracked by CME Group’s FedWatch tool, investors are currently pricing in more than a 90 percent chance of a rate hike by December.

Higher interest rates are seen as positive for the dollar, making it stronger against other rivals. The differential between monetary policy in the US and Japan is also contributing to the rise.

In Japan, the manufacturing PMI increased to 62.8. Analysts had estimated a 52.5 reading. In Australia, the AIG manufacturing index stood at 51.1, against with a prior reading of 54.2.

Earlier in the day, the Caixin/Markit manufacturing PMI for October came in at 51.0, showing no change from its previous month reading. China's official manufacturing PMI for October came in at 51.6, falling short from expected values, rising doubts about demand levels in the future.

On Tuesday, the Conference Board’s consumer confidence advanced to 125.9 in October from a previous 119.8, moving comfortably above analysts’ forecast of 121.

The Chicago Purchasing Managers' Index rose to 66.2, outperforming the September reading of 65.2 and above expectations of 61.

Today’s data front includes the release of ADP nonfarm employment change for October at 12:15 GMT, which comes in anticipation of Friday’s Labor Department data.

Fort Financial Services