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Buying The Japanese YenTitle:
Bank of Japan Inaction Helps Yen
The Bank of Japan decided against taking any more action to ease at this time, and that is helping the Japanese yen. Forex traders had been expecting the Bank of Japan to ease further, in an attempt to keep the yen weak, but the BOJ offered something of a surprise following the recent downgrade by Fitch.
Citing faster economic growth, Bank of Japan officials decided to forgo additional easing measures during the most recent BOJ policy meeting. Leaders insist that public investment has increased, along with private consumption. This situation has resulted in the BOJ deciding that further easing in an attempt to stimulate the economy is not needed.
Without the specter of more easing (at least for now), Forex traders feel a little more confident about buying the yen. The yen has ...
Title:
Yen Slides as Fitch Downgrades Japan
The Japanese yen fell today as Fitch Ratings downgraded Japan’s sovereign credit rating because country’s actions to reduce public huge public debt are too slow.
Fitch cut Japan’s long-term foreign-currency rating from AA to A+ and lowered the local-currency grade from to AA- A+. The outlooks on both rankings are negative. Some financial specialists recommended buying the yen against the dollar. They are reasoning that the yen is too attractive amid present turbulent times and the currency would bounce back rather soon.
USD/JPY was up from 79.29 to 79.83 and EUR/JPY rose from 101.62 to 101.96 as of 12:08 GMT today.
Title:
Europe Steps Closer to the Cliff Edge
The Week Ahead
Highlights
Europe steps closer to the cliff edge
Can the USD extend its rally?
Bank of Japan may extend maturity of its bond buys
Pricing in more QE from the Bank of England
Europe steps closer to the cliff edge
It was a pivotal week for the Eurozone after Greece announced that it was heading back to the polls after the top three parities failed to form a coalition government. So now Greece is leaderless, there is a caretaker government in place but it won't be able to enforce the austerity required to get the next tranche of bailout funds necessary for Greece to avoid running out of money in July. So as time runs out for Greece the European authorities have been clear: the upcoming election is a referendum on euro-membership. Either vote for pro bailout ...
Title:
Greece worries send euro to 4-month low vs. dollar
The euro fell to a four-month low against the dollar on Wednesday and was poised for more losses after Greece announced it would hold new elections, boosting the risk the country could exit the euro.
The prospect of prolonged political instability and worries about the knock-on effects of a Greek euro exit for struggling economies like Spain and Italy caused investors to flee the euro and seek the safety of the dollar and the yen.
The euro also hit a three-month low against the yen, while the dollar rose to its highest in four months against a basket of currencies.
"The uncertainty around the political situation in Greece continues to undermine risk appetite, which is affecting a range of currencies," said Paul Robson, currency strategist at RBS.
"There is uncertainty around the ...
Title:
Euro hits 4-months low on Greece jitters; Aussie dips
The euro hit its lowest level in nearly four months on Monday after Greek political leaders failed in their latest efforts to form a ruling coalition, keeping investors on edge over the risk of the country exiting the euro zone.
Coalition talks in Greece hit an impasse on Sunday and Greece's radical leftist leader spurned an invitation from the president for a final round of talks on Monday, all but ensuring a new election.
Adding to the negative tone, German Chancellor Angela Merkel's conservatives suffered a crushing defeat on Sunday in an election in Germany's most populous state, a result which could embolden the left opposition to step up attacks on her European austerity policies.
The euro seems likely to head lower in coming weeks, especially since the European Central Bank may ...
Title:
Dukascopy Morning Forex Overview : 14/05/2012
Fundamental Analysis
EUR
"Equity markets are driven by two things: fundamentals and sentiment."
- Lorne Baring, managing director at B Capital SA
European stocks climbed on Friday after a report showed U.S. consumer confidence increased to the highest level in four years in May.
USD
"Confidence has been boosted by lower gasoline prices."
- Paul Dales, a senior economist at Capital Economics Ltd.
U.S. consumer confidence rose by more than expected in May as consumers became more optimistic on the outlook of the country's economy.
GBP
"The April producer price data … do little overall to reduce the uncertainty as to whether or not the Bank of England will eventually do more Quantitative Easing."
- Howard Archer, an economist at HIS Global Insight
U.K. producer prices rose by more than ...
Title:
Nikkei gives up gains to end morning flat
Japan's Nikkei share average edged down in Monday's morning session, with early gains in response to China cutting bank reserve ratios succumbing to lingering unease ahead of Greece's last-ditch attempt to form a coalition later in the day.
The Nikkei ended flat at 8,952.66, after falling 4.6 percent last week to mark its sixth consecutive week of losses as concerns about a deepening euro zone crisis and slowing growth in China outweighed a largely positive earnings season.
"It feels like many markets are treading air, just before the edge of a cliff, but at the same time, if you assume markets understand the risks, it feels surprisingly strong," said Stefan Worrall, director of equities at Credit Suisse in Tokyo.
The broader Topix .TOPX was down 0.3 percent at 755.79.
A forecast of a ...
Title:
Dukascopy Afternoon Forex Overview : 04/11/2012
Dukascopy Fundamental Analysis
EUR
European stocks declined as company earnings missed estimates, talks on forming a Greek government entered a fifth day and JPMorgan Chase & Co. posted a $2 billion trading loss. Asian shares and U.S. futures fell.
USD
Wholesale prices in the U.S. fell in April for the first time in four months, led by a decline in fuel costs that signals inflation may cool. The producer price index dropped 0.2 percent after no change in March, Labor Department figures showed today in Washington.
GBP
Britons turned gloomier last month as a slump in construction pointed to an even deeper recession and producers ramped up prices, highlighting the long and difficult road back to economic health.
CHF
Swiss stocks fell for the seventh day, heading for the biggest weekly ...
Title:
EUR/GBP Testing 80.00 Barrier, As BoE Stops Printing Press
Sunrise Market Commentary
- Fixed Income: Largely uneventful session for core bonds
- Core bonds had an insignificant, technical and sentiment-driven session that left bond yields slightly higher in the close. Overnight, negative headline news on JP Morgan and Greece triggered a moderately strong opening of the Bund. Europe will be in the focus today with the publication of the Spanish banking plan and the EU spring forecasts.
- Currencies: EUR/GBP testing 80.00 barrier, as BoE stops printing press
- On Thursday, sentiment on risk turned slightly less negative, even without progress in the Greek debt/election crisis. Nevertheless, the decline in EUR/USD slowed. EUR/GBP reached a minor low just below 0.8000 as the BoE halted its program of asset purchases. For now, we see no ...
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