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The yen yesterday breached the 100 level for the first time in two months and is set for weekly declines against all its major peers before the Bank of Japan meets next week and following data that showed growth slowed. In Japan, gross domestic product growth slowed to an annualized 1.9 percent in the July-September period from 3.8 percent in the second quarter, the Cabinet Office said yesterday. BOJ policy makers gather next week for a two-day policy meeting that ends Nov. 21. Almost three-quarters of economists surveyed by Bloomberg expect the BOJ will add to stimulus in the first half of next year.
The dollar is poised for its first weekly slide versus the euro this month after Janet Yellen, the nominee to head the Federal Reserve, said easing measures won’t be removed too soon. Yellen said the central bank’s key interest rate, at a record zero to 0.25 percent, would remain low even after policy makers start to reduce monetary easing. The Fed has kept its benchmark for borrowing costs near zero since December 2008.
Euro demand may be limited before a report today forecast to confirm annual inflation in the region slowed to 0.7 percent in October, the lowest since 2009, from 1.1 percent in September. Consumer prices fell 0.1 percent on a monthly basis, the data are projected to show, according to the median estimate in Bloomberg survey.
EUR / USD: during the Asian session the pair traded in the range of $ 1.3445-60
GBP / USD: during the Asian session, the pair traded in the range of $ 1.6050-75
USD / JPY: during the Asian session the pair rose to Y100.30
Friday sees a much quieter calendar on both sides of the Atlantic, with the market left to further dissect the policy implications of this weeks comments from Fed Chair-nominate Yellen and BOE Governor Carney. The European calendar kicks off at 1000GMT, with the release of the October final HICP data. At 1215GMT, ECB Executive Board member Yves Mersch is scheduled to speak at the 6th Annual CFA Institute European Investment Conference in London. Last up, at 1730GMT, ECB Governing Council member Ewald Nowotny is scheduled to speak on "Hungary at the Crossroads", in Vienna. The US calendar gets underway at 1330GMT, when the Oct Import/Export Price Index data and the November NY Fed Empire State numbers are set for publication. The Philadelphia Fed index also declined in October, but it remained elevated. At 1415GMT, the October industrial production numbers and the capacity utilisation data will cross the wires. The US Sep wholesale inventories data will cross the wires at 1500GMT, the last data for the week.
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