What’s next? – USDJPY 11.05.18

The dollar was trading 0.06 percent higher vs the Japanese yen at 109.45 as of 07:10 GMT on Friday, supported by the dollar’s return to green territory.

The American currency came under pressure late on Thursday, as disappointed inflation data in the United States added worries about monetary normalization policies by the Federal Reserve.

The US consumer price index increased 0.2 percent in April, against a forecasted 0.3 percent growth rate. Inflation is a key benchmark for the Federal Open Market Committee.

The US dollar index, which measures the greenback’s strength against a basket of six major competitors, was up 0.12 percent at 92.63 by the time of this writing.

However, this result is expected to have little impact on expectation for further monetary adjustments by the Federal Reserve. Fed interest rate is now between 1.50 and 1.75 percent.

Fed funds tracked by CME Group’s FedWatch tool show that traders are weighing in a 100 percent chance of a rate hike in the June monetary policy meeting.

Traders also kept an eye on geopolitics. US President Donald Trump confirmed Thursday his meeting with North Korean leader Kim Jong Un will take place in Singapore on June 12.

The encounter is expected to reduce tension in the Korean peninsula. If so, we could see further gains for the dollar, which is seen as a risk currency in opposition to the safe-haven yen.

Ahead in the session, the US export/import price indexes for April are expected at 12:30 GMT. Later on, the University of Michigan will present its consumer sentiment survey for May at 14:00 GMT. FOMC Bullard is scheduled to speak as of 16:30 GMT.

FortFS