USD/JPY exhibits strength near four-month high around 151.00 ahead of US NFP data

USD/JPY holds onto gains near a fresh four-month high around 151.00 as the US Dollar trades firmly.
Fed Powell signals no rush for interest rate cuts.
The BoJ kept the door open for more interest rate hikes.

Sagar Dua FXStreet

The USD/JPY pair trades firmly near a fresh four-month high around 151.00 during Friday’s European session posted earlier in the day. The pair exhibits strength as the US Dollar (USD) extends its upside, with traders trimming bets supporting interest rate cuts by the Federal Reserve (Fed) in the September policy meeting.

During European trading hours, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh two-month high near 100.20.

US Dollar PRICE Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.10%	0.34%	-0.20%	0.19%	0.12%	0.64%	0.42%
EUR	-0.10%		0.34%	-0.29%	0.16%	0.15%	0.40%	0.38%
GBP	-0.34%	-0.34%		-0.57%	-0.18%	-0.19%	0.26%	0.06%
JPY	0.20%	0.29%	0.57%		0.38%	0.33%	0.72%	0.62%
CAD	-0.19%	-0.16%	0.18%	-0.38%		-0.10%	0.45%	0.24%
AUD	-0.12%	-0.15%	0.19%	-0.33%	0.10%		0.46%	0.37%
NZD	-0.64%	-0.40%	-0.26%	-0.72%	-0.45%	-0.46%		-0.10%
CHF	-0.42%	-0.38%	-0.06%	-0.62%	-0.24%	-0.37%	0.10%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

According to the CME FedWatch tool, the probability for the Fed to cut interest rates in the September meeting has diminished to 39.2% from 58.4% seen a week ago.

Traders pare Fed dovish bets as Chairman Jerome Powell signaled no rush for interest rate cuts in his press conference on Wednesday, warning that “tariffs have started showing up in consumer prices”.

Additionally, upbeat Q2 Gross Domestic Product (GDP) and June’s hot Personal Consumption Expenditure Price Index inflation (PCE) data have also forced traders to trim interest rate cut bets.

Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for July, which will be published at 12:30 GMT.

Meanwhile, the Japanese Yen (JPY) gains ground as Bank of Japan (BoJ) Governor Kazuo Ueda has kept the door open for more interest rate hikes. “Will continue to raise policy rate if the economy, prices move in line with forecast, in accordance with improvements in economy, prices,” Ueda said in the press conference on Thursday.

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).

GBP/USD remains slightly bid near 1.3300

GBP/USD now advances marginally and manages to dispute the 1.3300 region on Tuesday. Indeed, Cable regains some balance on the back of the lacklustre performance of the Greenback, all preceding the Fed’s meeting on Wednesday and the BoE’s gathering on Thursday.

EUR/USD recedes from tops, back below 1.1400

EUR/USD manages to set aside part of the recent weakness and clinches decent gains on Tuesday. Indeed, spot keeps the trade below the 1.1400 mark amid acceptable losses in the US Dollar, all following rising optimism of a US-Iran deal and steady caution prior to the FOMC gathering on Wednesday.

Gold bounces on poor US data

Gold remains under marked downside pressure on Tuesday, although the $4,000 zone per troy ounce emerges as a decent support for now. The precious metal’s pullback comes despite the modest losses in the US Dollar in a context of easing geopolitical tensions ahead of the key Fed event on Wednesday.

XRP falls toward $1.00 despite dwindling exchange reserves

Ripple (XRP) continues to trade under increasing pressure on Tuesday. This marks the second consecutive day of declines, reflecting broader risk-off sentiment as investors appear to shift gears in anticipation of the Federal Reserve (Fed) interest rate decision. On Wednesday, the Federal Open Market Committee (FOMC) is widely expected to leave interest rates unchanged in the 3.50%-3.75% range.

Warning signs in the stock market: Is this the top, or just a very short fuse?

Overnight, South Korea's Kospi fell more than 10%, SK Hynix lost close to 15% and Samsung Electronics lost 13%. Into that, Dow Jones Industrial Average futures traded up around 1% on paint and soft drinks, and S&P 500 futures sat roughly flat. An index that absorbs a memory-chip panic and prints nothing is not a calm market.

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