Dollar At 6-Week Lows Against Yen As Investors Seek Safety


The dollar touched fresh six-week lows against the safe haven yen on Wednesday as investors retreated to the sidelines amid concerns over a range of looming geopolitical risk events.

USD/JPY slid 0.16% to 109.23 by 07.30 AM GMT, the lowest level since April 21.

The dollar has fallen almost 1.4% against the yen so far this week, with traders cautious ahead of former FBI Director James Comey's testimony to a Senate committee on Thursday.

Investors are fearful that the Trump administration may be further damaged by any revelations that could emerge when Comey testifies about Russia's alleged involvement in the U.S. election.

The dollar was already on the defensive after last Friday's disappointing U.S. jobs report.

Most analysts believe the poor data will not stop the Federal Reserve from raising interest rates at its meeting later this month, but most market participants now expect a more dovish path in the second half of the year.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was a touch higher at 96.62, after hitting a low of 96.47 overnight; it's weakest since November 9.

Investors were also wary ahead of Britain's election and a European Central Bank meeting, both of which are also set for Thursday.

While most pollsters still expect British Prime Minister Theresa May's party to win a majority, a 'hung parliament' would throw Britain into political deadlock just days before formal Brexit talks with the European Union are due to begin on June 19.

Sterling edged lower again the dollar, with GBP/USD last at 1.2897.

The ECB is not expected to make any changes to monetary policy this week, but market participants will be watching President Mario Draghi's statements for his assessment of the euro area economy.

Last week, Draghi said inflation remains subdued and still requires substantial stimulus, tempering expectations for the bank to start planning for scaling back its stimulus program.

The euro slid lower against the dollar, with EUR/USD down 0.21% to 1.1253.

Meanwhile, the Australian dollar rose to one-month highs, with AUD/USD putting on 0.6% to trade at 0.7551 after data showing that the economy grew 0.3% in the first quarter, as its record expansion continued.

The New Zealand dollar was also higher, with NZD/USD up 0.17% to 0.7195, not far from the previous session's three-month high of 0.7204.

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