Yen weakens on economic growth revision
The Japanese yen was weaker on Monday after Friday saw a bigger than anticipated downward revision of the growth of the economy in Japan in the third quarter. The revision caused some analysts to reduce the chances that the Bank of Japan will hike interest rates when it meets on December 19, although some still expect the interest rate increase to materialize, especially if the Tankan report on business sentiment is strong.
In mid-afternoon trading in New York, the yen was 0.6 percent lower in relation to the US dollar to ¥117.10, while it dropped 0.7 percent to ¥154.66 against the euro.
The US dollar, meanwhile, dropped 0.1 percent to $1.3210 versus the euro to keep almost of all the gains it achieved on Friday. However, pressure was up on the dollar by the news that oil producing nations have reduced their exposure to the greenback. New data released by the Bank for International Settlements has Russian and the OPEC nations reducing their dollar reserves from 67 percent in the first quarter of the year to 65 percent in the second quarter. At least one analyst has said that there is no reason to think that the dollar selling was limited to the first half of the year.
Sterling moved little while investors waited to see what new CPI data in the UK, due on Tuesday, might have to say about where interest rates there might go in the future. The UK currency was steady at $1.9530 in relation to the US dollar, while it dropped 0.1 percent to £0.6765 against the euro.