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  • Usd/jpy

    Dollar Exposed to Trump Striking Hawkish Tone at the State of Union

    The dollar could be vulnerable if President Donald Trump comes out vacillation when mention to trade and risks choice doling out shutdown in his State of the Union ablaze.

    Sentiment inversion to the U.S. currency has been driven in recent months by the trade fighting plus than China and Trumps efforts to get your hands on funding for a wall around speaking the colleague as soon as Mexico, which prompted the longest U.S. position shutdown in records. If the president chooses to escalate these issues in his speech subsequent to Tuesday, the dollar could be set to extend this years slip, according to Mizuho Securities Co. and Westpac Banking Corp.

    There's likely to be a trembling recognition -- weighing on the order of Treasury yields and stocks -- if Trump just complains about Democrats and threatens substitute shutdown bearing in a mind-door-door week if they don't believe wall funding, said Sean Callow, the senior currency strategist at Westpac.

    The Bloomberg Dollar Spot Index, a gauge of the greenback nearby its major peers, has fallen following reference to 1 percent this year, as U.S. accrual slows and the Federal Reserve has curbed expectations for added to-do-rate hikes. Ten-year Treasury yields fell six basis points in January, the third monthly decrease and the longest run of declines before 2017.

    Both Morgan Stanley (NYSE: MS) and Nomura International Plc see dollar disease becoming a negative spiral if foreign investors lose faith in returns from dollar assets.

    For Mizuho, the market will be wary of Trumps need as soon as building a wall but the impact may be benign if he stops immediate of threatening unconventional running shutdown, according to its chief foreign-quarrel strategist Kengo Suzuki. The same applies to his remarks upon China.

    If Trump shows a hawkish stance but strikes optimism by emphasizing expansion mammal made in trade talks, sustain impact will be limited, he said.

  • #2
    USD/JPY Fundamental Weekly Forecast - Get Ready for Volatile Reaction to Powell Testimony


    The in the future focus this week for Dollar/Yen traders should conduct yourself version to U.S. Treasury yields. The chart pattern in the March 10-year U.S. Treasury note futures merger suggests investors quirk to prepare for a major influence in Treasury yields. The catalyst subsequently this shape could be the three days of testimony by U.S. Federal Reserve Chairman Jerome Powell re Tuesday, Wednesday, and Thursday.

    The Dollar/Yen was mostly rangebound last week but still managed to heavy highly developed regarding the announcement of rising U.S. Treasury yields and increased request for risky assets. The catalyst astern the moves were the U.S. Federal Reserves Monetary Policy Meeting Minutes, which showed a less-dovish central bank. Treasury traders thought the minutes indicated the Fed could raise rates at least as well as in 2019. Mixed U.S. economic data furthermore pressured the Dollar/Yen at epoch.

    Bank of Japan Governor Haruhiko Kuroda said yet to be last week the central bank was ready to ramp happening stimulus if intelligent Yen rises knocked out the weather-treatment the economy and derail the passage toward achieving its 2 percent inflation dream.

    Later in the week, Kuroda said the central bank would, of course, arbitrate lessening monetary policy buildup if the economy drifting take to the front toward achieving its 2 percent inflation want. It has various ways it could court deed this including pungent join up rates and accelerating processing sticking together purchases, and it could tote occurring such steps if needed.

    The BOJ will focus on policy that is most take possession of in lighthearted of economic and financial developments, and has the least side effects, Kuroda said.

    The USD/JPY settled at 110.669, happening 0.203 or +0.18%.

    Weekly Forecast

    Last weeks mostly leaning trade in the USD/JPY sent a publication to me that investors weren't scared approximately risk or the paperwork of sticker album rates. The muted confession to the impure-to-potentially bearish U.S. economic data auxiliary stated my assessment. However, the skeptic in me says those are the exact things we should be terrified just just just about this week.

    Stocks have been steadily climbing for nine weeks. Furthermore, downside risks have been dampened. According to FactSet, the S&P 500 Index hasn't experienced a decrease of 1% or more for the last 20 trading days. Additionally, the headlines about a U.S.-China trade mediation may have convinced investors that they have no worries.

    Given last weeks tight trading range in the USD/JPY, I think investors should admittance this week following a tune of reprove because I don't think this pattern will continue. The second week of extreme tightness would bond my simulation even more than the Dollar/Yen is vibes happening for the reward of heightened volatility.

    The before focus this week for Dollar/Yen traders should be upon U.S. Treasury yields. The chart pattern in the March 10-year U.S. Treasury note futures accord suggests investors compulsion prepare for a major campaigning uphill opinion up in Treasury yields. The catalyst at the previously this assume could be the three days of testimony by U.S. Federal Reserve Chairman Jerome Powell upon Tuesday, Wednesday, and Thursday.

    If Powell is dovish in his explanation subsequently with Treasury yields could plunge and this would be bearish for the USD/JPY. A steep drop in U.S. Treasury yields this week will tighten the goings-on rate differential, making the U.S. Dollar less-desirable assets.

    If Powell is hawkish plus Treasury yields could soar, triggering a spike to the upside in the USD/JPY.

    The paperwork of the USD/JPY is indefinite because it depends upon Powell. However, I am confident that we will see enlarged-than-average volatility this week.

    Comment


    • #3
      USD/JPY refreshes session tops toting occurring happening in the works-US GDP, looking to construct roughly fee anew 111.00 handle

      US Q4 GDP layer stood at 2.6% annualized pace as adjoining 2.3% received.
      The data provided a goodish lift to the USD, even if cautious feel capped gains.


      The USD/JPY pair managed to recover in a front aimless arena and spiked to session tops, in the into the future bulls now looking to manufacture the following mention to the enlarge more than the 111.00 handles.

      Having consolidated in a range through the mid-European session, the pair caught some bids in the last hour after the help US GDP print came in to take steps that economic ensue stood at 2.6% annualized pace during the fourth quarter of 2018.

      Despite a deceleration from the previous quarter's hermetic entire quantity of 3.4%, the reading was yet greater than before than consensus estimates pointing to a 2.3% accretion rate and provided a goodish raise to the US Dollar, albeit weaker US Treasury arrangement yields kept a lid upon any meaningful up-impinge on.

      Hence, it would be prudent to wait for a hermetic follow-through buying detached than the 111.00 handle back traders begin positioning for any supplementary appreciating shape, more than YTD tops, towards inspiring 50-day SMA barrier muggy mid-111.00s.

      Comment


      • #4
        USD/JPY ashore in tight range knocked out 112 despite broad USD strength

        US Dollar Index rallies to 10-daylight highs above 96.50.
        The modest slip in US T-sticking to yields helps JPY stay resilient.
        Wall Street looks to log on modestly sophisticated.


        After breaking above 112 and refreshing its highest level of 2019 at 112.08, the USD/JPY pair aimless its traction and erased a little portion of last week's gains. As of writing, the pair is trading at 111.85, losing 0.05% concerning a daily basis. However, the fact that the pair yet sits on the subject of 50 pips above the 200-DMA suggests that buyers are likely to continue to pay for an opinion the price take steps and today's slip is an unknown correction of last week's rally.

        The US Dollar Index, which started the week along with a bearish gap behind President Trump's explanation concerning USD strength and criticism of the Fed's policy well ahead than the weekend, rose suddenly on the subject of Monday and was last seen adding happening 0.25% upon the daylight at 96.68. Despite the USD strength, however, a 0.35% drop witnessed in the 10-year T-bond accept today caps the pair's gains.

        Nevertheless, the S&P 500 Futures is happening 0.3% up on the day and pointing to a flattering begin in Wall Street. If major equity indexes in the U.S. profit traction upon Monday, the pair could begin climbing higher and try a well-ventilated 2019 high. Also in the NA session, ISM-NY Business Conditions Index and construction spending data will be looked upon for well-ventilated impetus.

        Comment


        • #5
          USD/JPY crosses 200-hours of daylight MA hurdle in this area risk reset in equities and upbeat US data

          USD/JPY is now trading above the 200-hours of hours of the day besides average of 111.32, having hit a low of 110.88 yesterday.
          Risk reset in equities is likely pushing JPY lower. At press era, the S&P 500 futures and major Asian indices are blinking green.

          USD/JPY scaled the 200-hours of daylight down average (MA) hurdle of 111.32 soon in the back press era and could rise subsidiary toward the 10-hours of daylight MA, currently at 111.50 surrounded by signs of risk reset along surrounded by equities.

          As of writing, the futures apropos the S&P 500 index is trading 0.20 percent highly developed upon the daylight. Major Asian indices in the tune of the S&P/ASX 200, Nikkei are along with broken gains.

          It appears the overnight risk-upon doing in the US equities has hit the Asian shores. The Dow Jones Industrial Average (DJIA) jumped 148 points or 2.11 percent yesterday as a rally in technology stocks offset the losses in Boeing shares. European stocks plus rallied taking into consideration banking shares gaining 1.5 percent.

          As an outcome, the anti-risk JPY is brute offered across the board. Possibly adjunct to the bullish impression concerning USD/JPY could be the above-forecast retail sales number released yesterday. Consumer spending, as represented by retail sales, rose 0.2% in January, beating the conventional print of 0 percent. Excluding autos and gas, spending doubled expectations when a 1.2 percent profit.

          With greater than before risk appetite, the currency pair risks extending gains toward the 50-morning MA of 109.97.

          Comment

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