News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Wall Street
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • ECB's Makhlouf says fears of excessive inflation are exaggerated $EUR
  • It seems the markets are riding high, but risk is always lurking around the corner. Consider your escape plan before you find yourself in collapsing market. What are the top havens for different conditions in 2021? Find out from @JohnKicklighter here:
  • Angola to cut November oil exports to lowest since at least 2008 - Angola exported 1.1mbpd of crude oil in September, according to Refinitiv
  • ECB's Kazaks - The 2% price target will not be met in the medium term - Inflation outlook likely to be revised higher
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here:
  • ECB's De Cos says conclusion of FT report is incompatible with ECB guidance $EUR
  • 💶 Inflation Rate YoY Final (AUG) Actual: 3% Expected: 3% Previous: 2.2%
  • 💶 Inflation Rate MoM Final (AUG) Actual: 0.4% Expected: 0.4% Previous: -0.1%
  • 💶 Core Inflation Rate YoY Final (AUG) Actual: 1.6% Expected: 1.6% Previous: 0.7%
  • Heads Up:💶 Inflation Rate YoY Final (AUG) due at 09:00 GMT (15min) Expected: 3% Previous: 2.2%
Yen Weaker on Dovish BoJ, Pound Stronger on Increasingly Hawkish BoE

Yen Weaker on Dovish BoJ, Pound Stronger on Increasingly Hawkish BoE

Christopher Vecchio, CFA, Senior Strategist

Fundamental Headlines

- Jobs Data Simultaneous Release Jeopardized Under Curbs – Bloomberg

- Jordan Named SNB President Takes up Fight to Defend Franc – Bloomberg

- Argentine Move to Seize YPF Spoils Sinopec Deal – Reuters

- German Two-Year Debt Costs Hit Low – WSJ

- IMF Says Recovery Remains Fragile – WSJ

European Session Summary

While price action in the Asian session was clearly constructive and supportive of risk-positive sentiment, European traders brought a different attitude to work on Wednesday and the progress made by higher yielding currencies and risk-correlated assets was soon wiped out. The biggest moves come from the British Pound and the Japanese Yen, which, like the Canadian Dollar, have seen some indications of significant policy moves in the coming months from their respective central banks.

In terms of the Japanese Yen, it was the weakest major currency midway through the Asian session by a wide margin – the USDJPY had climbed by at least 0.60 percent – as Asian market participants seemingly rejoiced and chased the outstanding rally by the S&P 500 on Tuesday (its best in one month). The desire to trade in the low yielding currency for higher yielding assets was further supported after the Bank of Japan suggested that more easing may be necessary, even as the global economy shows signs of progress.

BoJ Deputy Governor Kiyohiko Nishimura’s comments that the BoJ is “committed to implementing additional easing measures, if deemed necessary” support recent technical moves by the USDJPY, which are starting to suggest that the USDJPY correction is finished and we’re set for the next major leg higher. If the BoJ is planning on implementing additional easing – seemingly ready to intervene at a moment’s notice – the Japanese Yen will weaken under the threat of this verbal intervention.

Like the Yen, the British Pound has been tossed around by market participants struggling to discern the direction of the Bank of England’s monetary policy. However, unlike the Yen which remains under pressure given the BoJ’s dovish stance, the Pound found significant support earlier in the day after the Bank of England minutes showed that Monetary Policy Committee member Adam Posen abandoned his stance for more easing. If the BoE is going to withdraw stimulus measures, or at least at the minimum attempt to communicate its desire to normalize monetary policy, the British Pound stands to gain substantially over the coming weeks.

Taking a look at credit, there is little rhyme or reason in the breakdown of how European sovereign debt has performed; Spanish debt is among the top performers while Italian and Portuguese debt have been the leading decliners. We now look to the 10-year Spanish bond auction tomorrow to see how confident market participants are in the Spanish government’s reforms.

GBPUSD 5-min Chart: April 18, 2012

Yen_Weaker_on_Dovish_BoJ_Pound_Stronger_on_Increasingly_Hawkish_BoE_body_x0000_i1028.png, Yen Weaker on Dovish BoJ, Pound Stronger on Increasingly Hawkish BoE

Charts Created using Marketscope – Prepared by Christopher Vecchio

Overall, the British Pound was the best performing major currency after the BoE minutes, gaining 0.32 percent against the US Dollar. All of the other majors fell against the US Dollar with the Japanese Yen and New Zealand Dollar leading the decliners, down 0.61 percent each. The Swiss Franc is also weaker, down 0.50 percent, after SNB President Thomas Jordan reaffirmed the SNB’s commitment to the EURCHF floor.

24-Hour Price Action

Yen_Weaker_on_Dovish_BoJ_Pound_Stronger_on_Increasingly_Hawkish_BoE_body_Picture_7.png, Yen Weaker on Dovish BoJ, Pound Stronger on Increasingly Hawkish BoEYen_Weaker_on_Dovish_BoJ_Pound_Stronger_on_Increasingly_Hawkish_BoE_body_Picture_1.png, Yen Weaker on Dovish BoJ, Pound Stronger on Increasingly Hawkish BoE

Key Levels: 12:55 GMT

Yen_Weaker_on_Dovish_BoJ_Pound_Stronger_on_Increasingly_Hawkish_BoE_body_Picture_4.png, Yen Weaker on Dovish BoJ, Pound Stronger on Increasingly Hawkish BoE

Thus far, on Wednesday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is trading higher, at 9968.49 at the time this report was written, after opening at 9939.85. The index has traded mostly higher, with the high at 9971.80 and the low at 9936.81.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.