The U.S. Dollar is down sharply against the Japanese Yen at the midsession. The down move in the USD JPY has been triggered by repatriation by Japanese exporters and bullish comments from the Japanese Finance Minister.
The U.S. Dollar is down sharply against the Japanese Yen at the midsession. The down move in the USD JPY has been triggered by repatriation by Japanese exporters and bullish comments from the Japanese Finance Minister. The Japanese government seems to be accepting the rapid rise in the Yen and is not expected to act to curb its strength. An early comment by the Japanese Finance Minister said the government would not intervene to curb the rally.
The EUR USD is trading slightly better at the midsession. The Euro rallied after the release of a worse than expected U.S. Durable Goods number but has since retreated to about the midpoint of the day. The earlier rise in the Euro was triggered by thoughts that the U.S. economy was not as strong as investors have been estimating and that the Fed would have to keep rates lower for some time. The key today will be the close. A close below 1.4710 will reverse the week to down and set up the possibility of a 2 – 3 week decline.
Downside pressure continues to push the GBP USD lower although short-term indicators show an oversold condition developing. The British Pound has been under pressure the last two days because of bearish comments from Bank of England Governor Mervyn King. In an interview, King said he favored a weaker currency to help stimulate U.K. exports.
Lower equity markets and weaker crude oil prices are helping to boost the USD CAD. Canadian Dollar traders are adjusting to the fact that the economy is likely to take a hard hit because of falling energy prices.
Despite declining demand for higher risk assets, the AUD USD and NZD USD are trading mixed today. The Aussie Dollar is hovering around unchanged while the Kiwi is trading better. A close in the Australian Dollar under .8673 will reverse the market to down on the weekly chart and could trigger the start of a 2 to 3 week correction. New Zealand Dollar traders seem to be unfazed by the weakness in demand for higher yielding assets. Although the NZD USD should close higher this week, it remains vulnerable to a downside correction if commodity and equity prices continue to fall.