The dollar headed for its biggest weekly decline versus the yen since April before Federal Reserve Chair Janet Yellen testifies to lawmakers next week and as traders trimmed bets the central bank will raise interest rates.
A gauge of the dollar was poised for its fourth weekly loss in five weeks as minutes of the Fed’s June meeting failed to provide additional insight on the pace of rate increases and record-lowvolatility encouraged demand for higher-yielding assets. The yen approached a five-month high versus the euro after a Portuguese banking company missed debt payments, boosting haven assets. South Korea’s won fell for a sixth day amid speculation the central bank will cut interest rates.
“The Fed is on the cautionary side despite data improving,” said Roy Teo, a currency strategist at ABN Amro Bank NV in Singapore. “With the current environment, where volatility remains low, the trend of carry trades remains in vogue and therefore you can see, to a certain extent, the dollar is underperforming.”
The dollar was little changed at 101.27 yen at 6:55 a.m. in London, having declined 0.8 percent this week, the most since the period ended April 11. The U.S. currency traded at $1.3599 per euro from $1.3609 yesterday. The yen appreciated 0.1 percent to 137.72 per euro after advancing to 137.50 yesterday, the strongest since Feb. 6.
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