The yen rose for a second day as falling stocks damped demand for the U.S. currency before Federal Reserve policy makers begin a two-day meeting today.
Japan’s currency rallied from near a six-year low against the dollar as a technical indicator signaled recent losses were excessive. Australia’s dollar snapped a six-day slide after minutes of the Reserve Bank’s policy meeting this month said interest rates should remain stable. The pound weakened versus most of its 16 major counterparts before Scotland votes on its independence this week.
“Dollar-yen has had a very strong rally on the back of very hawkish expectations from the FOMC this week,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. “It looks like consolidation ahead of the FOMC, with the U.S. dollar giving back a portion of its gains,” she said, referring to the Federal Open Market Committee.
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