Yen Continues Falling as Euro Remains Subdued Ahead of Inflation Data

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The yen fell on early Monday morning trade to a six-year low against the New Zealand dollar as investors’ risk appetite grew while hopes of an additional stimulus in China rose.

The dollar was trading at 102.87 yen, slightly close to its Friday’s one-week high of 102.98, while the euro momentarily touched a one-week peak of 141.74. The New Zealand kiwi Yen Continues Falling as Euro Remains Subdued Ahead of Inflation Datasurged as much as 89.23 yen, the highest since November 2007.

Dealers are keenly waiting for the release of China’s manufacturing PMI data on Tuesday, after recent disappointing data that shows the world’s second biggest economy is cooling down.

“We expect a decline to 49.8 in March from 50.2 in February, falling below 50 for the first time in 17 months, as growth momentum continues to fade. This should further heighten the urgency to ease policy,” Nomura analysts wrote to clients, according to Reuters.

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Investors are also keenly waiting for euro zone inflation statistics that will be released on Monday after Germany released inflation figures that were lower than expected.

The soft reading increases the risk of euro zone inflation, which is likely to stand at what European Central Bank President Mario Draghi termed the “danger zone of under 1 percent for the sixth consecutive month”.

However, Bundesbank President Jens Weidmann advised against overreacting to the decline in inflation as it was mostly triggered by short-term cyclical factors.

The euro was last trading at $1.3747 on Friday, where it touched a four-week low of $1.3704. This is in contrast to commodity currencies such as New Zealand and Australian dollars which have been boosted by possibility of additional stimulus in China.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com