Dollar hits six-week high against yen... time to change
The US dollar hit a one-month high against the yen on Tuesday, its highest since March 21. The latest US economic indicators to be released remained underwhelming.
Despite the lacklustre data, the US dollar has managed to rise due to expectations that the Federal Reserve would hike interest rates again soon, but it the indicators ramin weak investors could revise their expectations, said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. "If this week's remaining US indicators continue to be weak, such expectations that have supported the dollar could crumble easily."
The prevalent positive sentiment surrounding Asian equity markets, with Japan's Nikkei 225 gaining around 0.70%, was seen weighing on the Japanese Yen's safe-haven appeal and helped the pair to build on to its recent gains. The pair, however, remained capped below the 112.00 handle amid subdued US Dollar price-action, always against the backdrop of recent disappointment from the US macro data.
Some analysts said the closure of Tokyo markets for the Golden Week holidays was contributing to a lack of liquidity in the yen, which exacerbated its weakness against the dollar and the euro.
If we look at the market from this point of view we would say that we are close to a change of direction, the bulls are not yet fully convinced.
But on the other hand there are always two faces for each coin, my short position has been open since April 14; I look forward to seeing how the market evolves in the coming days
Despite the lacklustre data, the US dollar has managed to rise due to expectations that the Federal Reserve would hike interest rates again soon, but it the indicators ramin weak investors could revise their expectations, said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. "If this week's remaining US indicators continue to be weak, such expectations that have supported the dollar could crumble easily."
The prevalent positive sentiment surrounding Asian equity markets, with Japan's Nikkei 225 gaining around 0.70%, was seen weighing on the Japanese Yen's safe-haven appeal and helped the pair to build on to its recent gains. The pair, however, remained capped below the 112.00 handle amid subdued US Dollar price-action, always against the backdrop of recent disappointment from the US macro data.
Some analysts said the closure of Tokyo markets for the Golden Week holidays was contributing to a lack of liquidity in the yen, which exacerbated its weakness against the dollar and the euro.
If we look at the market from this point of view we would say that we are close to a change of direction, the bulls are not yet fully convinced.
But on the other hand there are always two faces for each coin, my short position has been open since April 14; I look forward to seeing how the market evolves in the coming days
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