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Forex - Dollar gains as Japan says G20 okay with stimulus

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Shutterstock photo - The U.S. dollar traded mixed to higher against most major currencies on Friday after a Japanese official said the country has not faced opposition among its G20 allies over its loose monetary policies.

The greenback traded lower against the euro after a key ECB policymaker said rate cuts will take place only if economic indicators worsen.

In U.S. trading on Friday, EUR/USD was up 0.08% at 1.3061.

ECB Governing Council member Jens Weidmann told the Wall Street Journal earlier this week that monetary authorities could cut interest rates if economic and inflation data indicated that policy loosening may be warranted, though he added that monetary policy is already quite expansionary.

By Friday, however, Weidmann reiterated that rate cuts were possible but only if data worsened, which gave investors breathing room to take up positions in the single currency and other higher-yielding assets.

Elsewhere, official data showed that Germany's producer price index fell 0.2% in March, disappointing expectations for a 0.1% rise and following a 0.1% slip the previous month.

The dollar, however, remained higher against the yen.

Japanese Finance Minister Taro Aso said earlier that Tokyo's stimulus policies have not run into opposition among the country's G20 counterparts.

The Bank of Japan has launched massive monetary easing measures that have weakened the yen to spur more economic growth.

Aso's comments weakened the yen and sparked dollar demand by fueling sentiments that further easing may be possible in Japan given that the country's move to looser monetary policy hasn't met opposition abroad.

While Japan's policies have been loose and have weakened the currency, the country still battles deflationary pressures, which justifies central bank action.

Elsewhere, the dollar also continued to face pressure in wake of Thursday data showing that manufacturing in the Philadelphia area of the U.S. disappointed.

The Federal Reserve's Philly manufacturing index fell to 1.3 in April from 2.0 in March, defying expectations for a 3.0 reading.

The numbers came days after a similar Fed index for New York State also failed to live up to market expectations and fueled talk the U.S. central bank won't rush to dismantle stimulus programs that weaken the greenback to spur investing, job creation and recovery.

The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.34% at 1.5227.

The dollar was up against the yen, with USD/JPY up 1.47% at 99.59, and up against the Swiss franc, with USD/CHF trading up 0.08% at 0.9334.

The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.04% at 1.0263, AUD/USD down 0.16% at 1.0285 and NZD/USD trading up 0.19% at 0.8429.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.19% at 82.85. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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