Dollar Stalls on Kaplan Comments as Korea Concerns Boost Yen

  • Won falls as trade reopens after Tuesday’s presidential vote
  • Aussie strengthens on positive rating comments after budget

Rivlin Sees Fed Staying on Track Despite Uncertainty

The dollar fell for the first time in three days as Federal Reserve Bank of Dallas President Robert Kaplan said he was cognizant U.S. inflation pressures were muted. The yen rose amid concern over North Korea’s nuclear program.

The greenback dropped versus all its Group-of-10 peers as Kaplan said it was possible the economy will “unfold in a weaker way” and the Fed will raise interest rates less than the three times this year it has suggested. The dollar also declined as President Donald Trump fired FBI Director James Comey amid the agency’s investigation of Russian interference in last year’s election.

South Korea’s won dropped as trade resumed following Tuesday’s presidential election after Sky reported the North’s U.K. ambassador as saying the country will proceed with a sixth nuclear test. Trading in Asia was subdued as many markets including Singapore and India were closed for public holidays.

  • USD/JPY falls 0.2% to 113.81, recovering from initial stop-loss driven lows
    • Bids for real money accounts at 113.50/60 reported by an Asia-based FX trader not authorized to speak to the media
    • “It could easily be the case the economy will unfold in a stronger way than I expect and we could do more. It’s possible it may unfold in a weaker way and we’ll do less,” Kaplan tells reporters after speech in Dallas
    • Bloomberg Dollar Spot Index drops 0.2%
    • Kuroda acknowledged BOJ’s bond holdings are currently growing at a pace of around 60t yen ($527b) -- well below the guideline in its policy statements
  • EUR/USD rises 0.2% to 1.0896 versus 1.0870/98 range
  • KRW weakens 0.2% to 1,134.13 per dollar
    • “Test will be conducted at the place and time as decided by our supreme leader, Kim Jong-Un,” Sky reports North Korea’s U.K. ambassador Choe Il as saying
  • Aussie gains 0.2% to 0.7362 on short position unwind after Tuesday’s budget was mostly well received by markets and first impressions from ratings agencies were positive
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