Dollar rebounds against yen and euro

<p>The dollar is up against both the euro and the yen today.</p>

The US dollar has made progress against both the yen and the euro today (January 7th), though gains were restricted by falls in global stocks.

Asian shares dropped to a new four-month low and disappointing US data held back the greenback, which still rose by 0.1 per cent to about 104.36 yen, reports Reuters.

This represents a recovery from the 0.6 per cent dip on Monday, when the dollar sank as low as 103.91 yen, a level not seen since before Christmas.

Richard Falkenhall, currency strategist at SEB in Stockholm, stated that the trend is for the dollar to rise as the US Federal Reserve cuts back its bond-buying.

"We had some dollar weakness in the run-up to the end of last year, based on liquidity – people bought the euro and sold the dollar. To some extent that's been reversed… Over the next couple of days flows may come back into the dollar," he said.

All eyes will be on the Fed in the coming days and weeks to see what changes new chair Janet Yellen will make after she was confirmed in the role by a US senate vote today.

Learn about the sterling and forex trading at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.