The Bank of Japan held off from expanding monetary stimulus on Thursday, defying market expectations for action even as soft global demand, an unwelcome rise in the yen and weak consumption threatened to derail a fragile economic recovery.
The U.S. dollar weakened against major currencies on Tuesday after weaker-than-expected U.S. economic data reinforced views that the Federal Reserve would take a dovish stance in a policy statement Wednesday. The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last down 0.445 at 94.418 after U.S. March durable goods orders and April consumer confidence data came in below the expectations of economists polled by Reuters.
USD/CAD has been trading quite aggressively lower for the last couple of weeks after a decisive break through the rising trendline connected from May 2015 lows, which is important evidence for a change in trend.
All eyes in financial markets were on an appearance by Janet Yellen on Thursday after meeting minutes showed the U.S. Federal Reserve is still far from another rise in interest rates, driving the dollar to its weakest against the yen in 17 months.
The dollar fell on Tuesday to its weakest against the yen since October 2014 as investors pulled away from riskier assets, pushing shares and oil prices lower as the outlook for U.S. interest rates remained clouded.