Dollar mostly lower, yen rises as investors seek haven
Dollar was mostly lower as investors sought safety of the Japanese currency amid sharp losses.
NEW YORK (AFP) - The dollar was mostly lower Monday as investors sought the safety of the Japanese currency amid sharp losses on US and European equity markets.
Investors sent stocks tumbling in part due to concerns about the global economic slowdown. The yen, a traditional haven in times of market turmoil, rose at one point to its highest level against the dollar, at 115.18 yen, since November 2014.
Kathy Lien of BK Asset Management said that "115 is long viewed as the line in the sand for the BoJ (Bank of Japan).
"Not only has this level held for the past year but with the yen appreciating almost 300 pips since they went to negative rates, the central bank will not be happy with the recent rise in the currency," she said.
China s announcement Sunday that its foreign exchange reserves had fallen by almost $100 billion in January to their lowest level in more than three years was not as bad as analysts expected. But it cast further doubt on how much longer Beijing can defend the yuan from falling.
The Chinese markets are closed this week for the Lunar New Year holiday. On Monday, the yuan was at 6.5685 per dollar, slightly stronger than Friday.
Federal Reserve Chair Janet Yellen is scheduled to appear Wednesday and Thursday in Congress to discuss the economy and monetary policy. Markets are waiting to see what she indicates about how fast the Fed will lift rates following its first rate hike in December after more than nine years.
"The widespread expectation is that she s going to do what the Fed has been doing of recent, which is to stick to the idea of more rate hikes throughout this year while also alluding to keeping a watchful eye on global developments," said James Stanley, currency analyst at DailyFX.
