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#Money,#Business : Dollar off 8-week high vs yen but on track for weekly gain

The dollar traded below an eight-week high against the yen on Friday, with the near-term focus on whether forthcoming US economic data would provide the catalyst for further gains in the greenback. The dollar held steady at 113.85 yen, having pulled back from an eight-week high of 114.38 yen set on May 10. On Thursday, the greenback fell 0.4 percent against the yen, recording its first daily decline in five days as investors consolidated recent gains. 

Concerns related to the fallout of US President Donald Trump’s unexpected dismissal of Federal Bureau of Investigation chief James Comey also helped weigh on the dollar. The greenback, however, has still risen 0.9 percent so far this week, putting it on track for its fourth straight weekly gain against the yen. 

The dollar has been surprisingly well-supported against the yen and the market seems to have a very optimistic view,” said Masafumi Yamamoto, chief currency strategist for Mizuho Securities in Tokyo.

While the US growth in the second quarter will probably show some improvement after a weak first quarter, growth could still remain stuck below 2 percent, Yamamoto said.

The focus now is on whether forthcoming US economic indicators, such as data on retail sales and the consumer price index due later on Friday, will provide the spark for the dollar to extend its recent against the safe haven yen, analysts say.

The euro was little changed at $1.0864. Earlier this week it had set a six-month high of $1.1024 on relief over centrist Emmanuel Macron’s victory in France’s presidential election.
Sterling held steady at $1.2885, having stabilised after hitting a one-week low of $1.2849 on Thursday.

The pound had come under pressure on Thursday after the Bank of England’s inflation report showed interest rates are unlikely to rise within the next two years.

The BoE’s Monetary Policy Committee also voted 7-1 in favour of keeping interest rates on hold this month.

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The New Zealand dollar eased 0.2 percent to $0.6840 , staying on the defensive after tumbling 1.3 percent on Thursday.

The kiwi had slipped to its lowest level since June 2016 at $0.6818 on Thursday, after the Reserve Bank of New Zealand stuck to a neutral bias on policy, warning investors they were reading the outlook wrong and expressing approval of the currency’s declines this year.
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