Testing the yen

April 8, 2016

We've seen a modest reversal in the yen overnight after the move below 110 on USDJPY appeared to trigger a wave of stops to below the 108 level as longer-term positions were shaken out of the market. Comments from Finance Minister Aso overnight referred to the undesirability to rapid yen movements, referring to recent movements as one-sided and stating action would be taken as needed. But there was no reference to current levels, so the market does not have a line in the sand on USDJPY. If we measure from the 29th January, then you have to go back to 2010 to see a similar (70 day) period during which the yen appreciated by a similar amount versus the dollar (just under 10%). The yen’s impact on the Japanese economy has diminished over recent years and there is a case to say that the yen is hardly over-valued around these levels given the big weakening move of 2012 to 2014, but given the continued deflationary backdrop against which Japan finds itself, then this move is hardly likely to be welcomed. Still, it’s going to be an interesting few weeks ahead of the next G7 meeting towards the end of May which happens to be taking place in Japan.

Most other things in FX have been pretty steady compared to the yen. Sterling is still finding it tough going, just the Aussie and kiwi underperforming by a greater amount over the past week. The pressure of the upcoming referendum is always in the background and the latest headlines surrounding the PM (and Panama) have probably not helped sentiment at the margins. For today, the Canadian jobs data stand out on the calendar, with the rate seen steady at 7.3% and employment seen rising 10k after the modest decline seen in the data for February. The CAD’s relentless seen to mid-March has stalled of late with USDCAD hovering above the 1.30 level. We’d need to see some fairly punchy numbers to push below this level and put some doubt into the belief that the Bank of Canada can still cut rates late this year (around 30% probability towards year end).

Publication source
FxPro information  FxPro reviews

December 2, 2016
Oil may remain above $50
The Oil price continued to push higher today reaching its highest level in over a year with some predicting that the OPEC deal reached yesterday was a game changer and further gains are expected...
November 29, 2016
Euro may hit parity with US dollar
The Euro was under further pressure today against the US dollar on the back of political instability in Italy and, bringing it closer to parity with its American counterpart...
November 28, 2016
ECB speeches, OPEC rumours to dominate Monday
The US is back to the markets in full swing today as investors return from the long weekend and while this may have a major impact on the markets (given the fact that US bonds and US dollar had such a massive influence on global markets recently) other factors dominate in the calendar with the US being present...

Orbex Rating
Tickmill Rating
HotForex Rating
Grand Capital Rating
 FXTM Rating
FBS Rating

Empire Option Rating
TropicalTrade Rating
Banc De Binary Rating
365BinaryOption Rating
OptionBit Rating
Grand Option Rating