The yen rollercoaster

July 27, 2016

Today will be about waiting for the Federal Reserve decision this evening. Of course, there is no tangible chance of a change in rates, so the focus will be on the shifts in the statement and on their assessment on the outlook for policy. The last meeting saw the uncertainty surrounding the UK’s Brexit vote holding the Fed back. That’s now passed, even if the result was not as expected, so the focus is back on the domestic economy and whilst the latest data showed headline employment rebounding, the longer-term measures of momentum on the US labour market still suggest that activity is slowing.

Overnight, the rollercoaster that is the yen has been the main focus, with the move to 104.00 level on USDJPY seen yesterday reversed overnight as reports filter through with more details of the anticipated fiscal stimulus. It was the initial announcement on this earlier this month, in the wake of the Upper House elections that sparked the initial weakening of the yen. Reports also suggest that this will be approved by the cabinet on 2nd August next week. With this confirmed, this could reduce the chances of further stimulus from the BoJ at the end of this week. Expectations are for a further cut of rates into negative territory, together with a further increase in the monthly expansion of the monetary base, but the BoJ could choose to keep its power dry and give fiscal policy the chance to work.

Before then, UK GDP data is the main focus at 08:30 GMT. The economy is seen expanding 0.5% QoQ. This covers the second quarter and the period during which the economy was supposedly held back by the uncertainty of the Brexit vote at the end of June. With a monetary easing largely priced in, the data would need to be substantially different vs. expectations if it is to have an impact on the currency.

Publication source
FxPro information  FxPro reviews

September 27, 2016
The US election beta
Having obsessed about an event that did not happen this month (a Fed tightening), markets now turn to obsessing about an event that will happen, namely a change of US President...
September 27, 2016
Oil prices are moving towards stabilisation
The oil prices start the week on an upbeat note as the informal OPEC meeting may end with a positive agreement for the oil market, which could resolve in production kerbs and freeze said the Algeria’s Energy Minister on Sunday...
September 27, 2016
US politics cast shadow over NZD
It's been an interesting start to the week as politics is looking likely to take centre stage amongst a market which is becoming increasingly worried over the result of the US presidential election...

OANDA Rating
Larson&Holz IT Ltd Rating
HotForex Rating
Grand Capital Rating
OctaFX Rating
Tickmill Rating

24option Rating
Beeoptions Rating
OptionsXO Rating
TropicalTrade Rating
Binary Brokerz Rating
Banc De Binary Rating