Analysis and Opinion »

USDJPY jumps to 116

FXTM UUIIFXBR
Share on StockTwits
Published on
www.forextime.com

The major talking point during European trading today is the USDJPY unexpectedly jumping 130 pips while recording a new six-year high of 116.096. The JPY weakness has been led by reports that Japanese Prime Minister Shinzo Abe, following a slip in public support levels over the recent weeks, is considering holding a snap election and postponing, or even cancelling altogether, the rumoured sales tax increase for 2015. The combination of these two surprising reports has resulted in the widespread punishment of the JPY today. At the moment, these reports are just rumours, but we could be in for an interesting trading session in Asia later if the story escalates further.

Elsewhere, both the Eurodollar and Cable are trading narrowly (within 30 pips) with investors clearly showing caution before key economic data is released later in the week. Investors are hesitant towards purchasing the Sterling, due to awareness that so many potential downside risks are present for tomorrow’s Bank of England (BoE) Inflation Report. BoE Governor Mark Carney could really punish the pound by expressing the potential Spring 2015 UK rate rise is off the agenda. It is also worth noting that the BoE has always maintained strong views on weak price pressure (inflation) and Carney could weaken GBP investor appetite further if he downgrades future inflation expectations tomorrow in the wake of UK inflation falling to a five-year low.

In reference to the difference of opinion regarding Brent Oil’s spike to $84.96 on Monday morning, it can now be deciphered that the move was linked to improved China exports and Dollar profit-taking, rather than elevated geo-political tensions in Eastern Europe and Libya. It was surprising that some assumed the re-surfacing of political tensions to be behind the bullish move because there have been concerns regarding an oversupply of oil for weeks now. Since the unexpected appreciation on Monday morning, Dollar strength has since pressured Brent Oil into recording a new four-year low ($81.23).

Written by Jameel Ahmad, Chief Market Analyst at FXTM.

For more information please visit: Forex Time 

Disclaimer: The content in this article comprises personal opinions and ideas and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime Ltd, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice

NOTES TO EDITORS

The FXTM brand name was founded by Andrey Dashin in December 2012. FXTM provides access to the global currency market and offers trading in forex, precious metals, Share CFDs, ETF CFDs and CFDs on Commodity Futures. Trading is available via MT4 and MT5 platforms with spreads starting from just 0.5 on the Standard MT4 trading platform and from 0.1 on the ECN.MT4 and ECN.MT5 trading platforms. Bespoke trading support and services are provided based on each client’s needs and ambitions – from novices, to experienced traders and institutional investors. The brand name is registered under various jurisdictions, one of which is regulated by the Cyprus Securities and Exchange Commission (CySEC), whereby FXTM is registered under license number 185/12.

The post USDJPY jumps to 116 appeared first on Forex Circles.

Share on StockTwits