FOREX Watch: USD/JPY hits six-week lows
The US dollar slumped for a third consecutive day against the yen, hitting a session low in the New York trade. The USDJPY dipped to a low of 97.51 before consolidating at 96.74, a loss of more than half a percent. This represents the lowest trade for USDJPY since June 26, when the pair was in the midst of an ascent triggered by FOMC hawkishness.
Speculation around the US Federal Reserve was once again at the centre of the USDJPY trade. On Monday the pair tumbled following a speech by Dallas Federal Reserve President Richard Fisher, who warned investors not to rely on monetary easing. The pair has been descending since Friday when the US Department of Labor reported job growth was weaker than expected for July.
Fed speculation wasn’t the only thing weighing on the USDJPY trade. The yen enjoyed broad support Tuesday ahead of the Bank of Japan rate decision and monetary policy announcement, which is expected Thursday. On the heels of positive inflation growth in the Japanese economy, the Bank of Japan is less likely to embark on further stimulus measures, a decision that saves the yen from further debasement.
The retreat of USDJPY back below the 98.00 mark has placed bearish pressures on the pair, which is struggling to stay clear of the 97.51 support handle. While unlikely to be tested in the next session, the pair’s next resistance level is 98.84.
Later in the week Japan will report on annualized net lending and foreign investment in Japanese equities and bonds. On Friday Japan also sees the release of the July Consumer Confidence Index, accompanied by the Bank of Japan Monthly Economic Survey. High readings for both figures will be seen as positive, and will support the yen going into the weekend.
On Thursday the US Department of Labor will report on last week’s jobless claims, a release that is usually greeted with heavy movement for US dollar pairs.
|Forex Broker Spreads »|
|Most Popular Articles »|