The dollar fell from eight-month lows against the other major currencies. The dollar was under pressure after the political decisions of the Bank of Japan and the Federal Reserve System. The event calendar was empty yesterday amid the Labor Day celebration. According to William Dudley (the New York Fed Governor) the Fed should have more powers to provide emergency financial support for investment firms in case of liquidity problems.
The EUR/USD set new session highs after Manufacturing PMI report in the Eurozone and Germany. The Manufacturing PMI in the Eurozone came in at 51.7. Manufacturing PMI in Germany showed 51.8. Mario Draghi gave a speech at the Asian Development Bank conference in Asia. According to him there is no alternative to the soft monetary policy until we see positive prospects of the world economy.
In Britain, the markets did not work amid Early May celebration.
On Monday, the yen rose to new 18-month highs. The dollar fell when the market found out that the Japanese regulator would not intervene the foreign exchange market to weaken the national currency. Nikkei Manufacturing PMI came in at 48.2 versus the previous value of 48.0.