What’s next? – USDJPY 23.05.18

The dollar was trading 0.39 percent lower vs the yen at 110.46 as of 07:10 GMT on Wednesday, as Trump remarks on China trade talks weighed on the dollar and increased demand for safe-haven assets such as the Japanese currency.

The US dollar index, which measures the greenback’s strength against a basket of six major competitors, was up 0.05 percent at 93.58 by the time of this writing.

On the news front, President Donald Trump said he was not satisfied with the achievements of trade negotiations with China representatives in Washington.

Also, Trump said there is “a very substantial chance” the meeting with North Korean Leader Kim Jong Un “won’t work out”. His remarks came after a meeting with South Korean President Moon Jae-in.

“I don’t want to waste a lot of time and I’m sure he doesn’t want to waste a lot of time. So there’s a very substantial chance it won’t work out and that’s OK. That doesn’t mean it won’t work out over a period of time.”

Overall, the American currency remains on a positive track and it is likely the 94 mark will soon be tested. On Monday, the dollar extended gainst up to 93.62, the highest level in months.

US 10-year Treasury bond yields were also close to 3 percent on expectations the Federal Open Market Committee will continue to adjust its monetary policy in the near future.

On Thursday, the Federal Reserve will present minutes of the latest monetary encounter and investors will be paying close attention to the rhetoric used by FOMC members.

Ahead in the day, Markit Economics is expected to present preliminary manufacturing and services activity data at 13:45 GMT. New home sales for April are next at 14:00 GMT.

Also, the Energy Department will unveil official crude inventories half and hour later. Minutes of the latest FOMC monetary policy meeting will be out at 18:00 GMT.

The pair is expected to recover in the next few hours as the dollar keeps a strong position in the market. However, tomorrow’s FOMC minutes could influence its position considerably.

FortFS