Favorable Comments Boost Japanese Yen

The U.S. Dollar is trading mixed against most major overnight. Tradersare considering a slew of information including whether the globaleconomy can continue to improve once the central banks begin to pulltheir stimulus plans.

The U.S. Dollar is trading mixed against most major overnight. Traders are considering a slew of information including whether the global economy can continue to improve once the central banks begin to pull their stimulus plans. There is also some debate taking place regarding how aggressive each central bank will be following their decisions to end their stimulus plans.

Traders are also speculating on the activity of the G-20. So far traders expect the G-20 to provide guidance regarding banking executive compensation and plans to better coordinate activity during financial crises.

The USD JPY is the big loser overnight. There is some carryover news regarding repatriation supporting the Japanese Yen overnight, but the biggest story is the comments from the Japanese Finance Minister who said he has ruled out intervention at current levels. This provided some relief to traders who were concerned the government was becoming concerned about the rise in the Yen and its possible negative effects on exports.

The GBP USD continues to remain weak following yesterday’s huge sell-off. The bulk of this week’s weakness in the British Pound was triggered by comments from Bank of England Governor Mervyn King. King said he favored a weaker currency to help increase exports to support the U.K. economy.

A pick-up in demand for higher risk assets overnight is helping to boost the EUR USD, AUD USD and NZD USD. A slightly better stock market is helping to shore up these three markets. A substantial retracement should drive them higher, but don’t look for new highs for the week on this move.

Better energy prices are putting some light pressure on the USD CAD. The damage has been done, however, so don’t expect a turnaround in the Canadian Dollar. Look for a short-covering rally which is met with possible selling pressure late in the day

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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