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Japanese Yen – Market News
Throughout May, the British pound has battled with the $1.30 level against the US dollar.
Since April 27th, the majority of trading in GBP/USD has occurred within a narrow range between $1.2845 and $1.30. Only once since that date did the pair manage to post a close above $1.30, which occurred on May 19th at $1.3033.
Psychologically important levels change over time, but as of now, $1.30 is definitely seen by foreign exchange traders and analysts as such a level, and in the short-term is considered a benchmark for judging the British currency’s underlying strength. View article >
The likelihood of a US rate hike in June is falling fast, as is the US dollar.
Just one week ago, the implied probability of the Federal Reserve hiking US interest rates at next month’s meeting – a probability derived from prices in Fed funds futures
contracts – stood near 85%. As of Monday, that probability had fallen to 74%, and at the end of yesterday’s session (Wednesday), it stood at roughly 62%. View article >
The Korean won finally made its move yesterday away from the 1130-to-1140 range against the US dollar. The exchange rate for USD/KRW had been trapped between the two prices for much of the previous ten trading days. At the end of yesterday’s New York session – the traditional end of the FX trading day – USD/KRW stood at 1124.30.
Renewed strength in the won has followed the election victory on Wednesday of Moon Jae-in, who succeeds former president Park Geun-hye as South Korea’s leader. View article >
Former Rothschild banker and centrist candidate Emmanuel Macron is the new French president.
Macron secured almost precisely two-thirds of yesterday’s vote (66.06%) and, in doing so, easily fended off his competition, Marine Le Pen, who secured one-third (33.94%).
At 39, Macron will become France’s youngest ever president. He also becomes the first president since 1958 from outside of the two traditional ruling parties – Les Républicains and the Socialist Party. View article >
Judging by asset prices, investors are no longer concerned about a Marine Le Pen victory in Sunday’s French election.
As of writing, at 05:20 GMT on Friday morning, the euro is buying almost 1.1 US dollars (EUR/USD 1.0989) and is at its highest level against the ‘greenback’ since November-9th, the day of Donald Trump’s surprise election victory.
Against the Japanese yen, the euro has made new 4-month highs today, reaching 123.66 a little after midnight. View article >
Little was expected from today’s RBA announcement, and little was delivered. Interest rates in Australia were kept at record lows of 1.5%.
Changes in Australian dollar exchange rates pre and post-RBA have been minimal. As of writing, a little more than three hours after the RBA’s announcements, both AUD/USD and AUD/JPY are slightly lower from this morning’s levels, at 0.7530 and 84.35 respectively. View article >
On Friday, Scotiabank – otherwise known as the Bank of Nova Scotia – outlined four factors that would drive Asian currencies higher in 2017.
Investors would “pour funds” into Asian markets on the following grounds:
1) If the Bank of Japan and European Central Bank continue with their stimulus programs, providing “accommodative” levels of liquidity to the economy.
With three consecutive months of positive core inflation in Japan, it is unlikely that the BoJ will be ending stimulus any time soon. View article >
Japan’s National Core CPI – an inflation reading that strips out volatile food prices – has risen on an annualized basis for the third consecutive month.
For the year ending March-17, core CPI grew 0.2%, matching February’s figure and improving on January’s 0.1%.
Although the rate of growth appears slight, it is a welcome development for central bankers in Japan, who have been battling deflation in the country for the best part of twenty-years. View article >
The FX majors took a breather overnight as they awaited President Trump to unveil his tax proposals. The plan is rumoured to include a cut in corporate tax rates to 15% and a 10% tax on foreign profits.
A cut in the foreign profit tax rate could spike US dollar demand as US corporations take advantage of the favourable rates to repatriate profits. View article >
Within the past hour, the Australian dollar has fallen sharply following weaker than expected CPI data.
Figures from the Australian Bureau of Statistics
show that consumer prices grew 0.5% in the first-quarter of 2017 and at an annualized rate of 2.1%.
AUD/USD fell from 0.7539 to 0.7508 on the news and, as of writing, trades at 0.7512.
AUD/JPY fell from 83.90 to 83.50 and trades at 83.58 as of writing. View article >