Busy data week with retail sales, housing starts due later
By Joseph Adinolfi, MarketWatch , Hiroyuki Kachi
The dollar was slightly higher against the yen and euro on Monday, as investors awaited Federal Reserve Chairwoman Janet Yellen’s congressional testimony on Tuesday and a policy announcement from the Bank of Japan.
European markets have calmed following a wave of doubt in the soundness of the continent’s financial system catalyzed by Espírito Santo Financial Group SA’s PT:ESF -8.85% announcement Thursday that it had suspended trading in its own shares and bonds. The company is the controlling shareholder of Portuguese lender Banco Espírito Santo SA. PT:BES -7.07%
The dollar USDJPY +0.20% continued to rise against the yen Monday after a volatile weekend, reaching ¥101.49 compared with ¥101.34 late Friday.
The euro EURUSD +0.17% was at $1.363 from $1.361 Friday, and at ¥138.25 from ¥137.90 against the yen.
Analysts expect the Bank of Japan policy board announcement to signal no change in the bank’s monetary base target, according to a research note from RBC Capital Markets. Meanwhile, Yellen will field questions from Congress on Tuesday and Wednesday. Her testimony before the Senate Banking Committee on Tuesday begins at 10 a.m. Eastern Time.
Investors also will focus on a string of U.S. economic data this week, including retail sales on Tuesday and housing starts Thursday.
Still, these events are unlikely to give a clear new direction for dollar-yen trading, said Marito Ueda, a director at FX Prime by GMO Corp.
“The situation will likely remain in a standoff for the time being,” said Ueda, who expects the dollar to trade between ¥101.20 and ¥101.80 for the rest of the week.
The WSJ Dollar Index XX:BUXX +0.05% , a measure of the dollar against a basket of major currencies, was up 0.03% at 72.85 Monday morning.
