Yen weakens ahead of Fed decision

Story link: Yen weakens ahead of Fed decision

The yen was weaker on Wednesday ahead of the decision on interest rates from the US Federal Reserve, as most investors expected a rate cut, and with it gains in equities and a return to risky carry trades.

At almost 2 p.m. in New York, the yen traded at ¥107.2150 to the dollar, at ¥158.7371 to the euro and at ¥213.0791.

On the other hand the Swiss franc, which is also sensitive to investors’ willingness to enter into risky deals, was higher against most major currencies on more losses in credit markets.

In afternoon trade in New York the franc traded at SFr1.0913 to the US dollar, at SFr1.6158 to the euro and at ¥98.2407 to the franc.

The US dollar was little changed versus the euro, trading at $1.4805 to the euro, ahead of the Fed’s decision as investors dealt with conflicting reports.

The Commerce Department said that the US economy grew by only 0.6 percent in the fourth quarter, half of the growth that had been anticipated, but a private report from ADP Employer Services said that 130,000 jobs were created in the US this month.

Meanwhile, the Polish zloty gained on the euro and the US dollar after the central bank there raised the 7-day reference rate to 5.25 percent and on a report that the Polish economy expanded at its fastest pace in 10 years last year.

The Polish currency was trading at 2.4413 zloty to the greenback and at 3.6138 zloty to the euro in afternoon trade in New York.

The South African rand, on the other hand, dropped against all major currencies on reports that inflation was up there in December.

It took R7.3345 to buy a US dollar and R10.852 to buy a euro while the yen traded at ¥14.662 to the rand.