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.

Free Trading Guides
EUR/USD
Mixed
Low
High
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
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
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
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • Crude #oil prices, $NOK and $SEK may rise if Donald Trump’s speech on trade war developments amplifies market buoyancy against the backdrop of critical US CPI and retails sales data. Get your market update from @ZabelinDimitri here:https://t.co/5rdK7xsQNq https://t.co/YnlQjKNZdS
  • RT @next_china: U.S., China chief trade negotiators spoke by phone on Saturday, Xinhua reports https://t.co/dMQtd0g4jY
  • The $AUDUSD and $EURUSD downtrend may prolong as traders counterintuitively buy into their descent. Meanwhile, the USD/CAD uptrend may accelerate on rising net-short bets. Get your market update from @ddubrovskyFX here: https://t.co/dlzJ31kf3f https://t.co/xp8P9MmCgb
  • As we head into next week, Cable is continuing to digest the massive leg higher last month, which at some point soon could mean another surge. Get your $GBPUSD technical analysis from @PaulRobinsonFX here: https://t.co/LJ42YhDe3X https://t.co/5hGwhGBpLB
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia from @DavidCottleFX here: https://t.co/E2hqoRdO7q https://t.co/urMnUCq4fn
  • RT @markets: White-hot pot stocks have flamed out in spectacular fashion https://t.co/3GsVsRyZaZ
  • What is the best time to trade #forex? Find out: https://t.co/M9R46r5ewa #tradingstyle https://t.co/gJ1QDrox67
  • #Gold prices may be given a tailwind from the FOMC minutes and escalating trade war risks if they fuel demand for anti-fiat assets amid expectations of additional Fed easing. Get your $XAUUSD market update from @ZabelinDimitri here: https://t.co/OJ7WUY9W7E $gld https://t.co/kBp3opzptm
  • Why should you set trading goals? How can it help regardless of what your #tradingstyle is? Find out: https://t.co/AYdD7ODlv1 https://t.co/G0ftVurNNN
  • Manning the penalty box today...i hope there aren't too many visitors https://t.co/1y81Li7laL
Japanese Yen to Rise as Intervention Targets Volatility, Not Direction

Japanese Yen to Rise as Intervention Targets Volatility, Not Direction

2011-03-19 05:21:00
Ilya Spivak, Sr. Currency Strategist
Share:
Japanese_Yen_to_Rise_as_Intervention_Targets_Volatility_Not_Direction_body_TOF_03182011_JPY.png, Japanese Yen to Rise as Intervention Targets Volatility, Not Direction

Fundamental Forecast for Japanese Yen: Bullish

After a week of breakneck volatility that saw the Japanese Yen surge to a record high only to rapidly reverse course amid the first coordinated G7 FX market intervention in over the decade, the outlook going forward appears anything but clear. Looking ahead, policymakers with a clear challenge vis-à-vis the exchange rate: on one hand, a stronger Yen threatens the critical export sector that will be seen as instrumental in helping the economy recover; on the other, the Yen's increasing purchasing power will help to dull the cost of recovery efforts for individual as well as public and private entities considering so many goods and resources in Japan are imported. On balance, this means Japanese officials will look to manage Yen volatility rather than push prices in a given direction, suggesting renewed strength may be allowed to progress undeterred provided it progresses gradually.

With this in mind, the reasoning behind renewed Yen strength is compelling given the considerable headwinds still facing risk sentiment, hinting repatriation and an unwinding of carry trades will pressure the Japanese unit higher. First, while yielding a burst of knee-jerk optimism, the G7 action left core issues in the aftermath of the Tohoku earthquake largely unresolved. Indeed, casualties continue to mount, the extent of the damage and cost of reconstruction remains uncertain, and the threat of disaster at the Fukushima Daiichi nuclear power plant continues to linger.

Meanwhile, a new phase of the Libyan crisis began to unfold as the UN Security Council authorized the establishment of a no-fly zone and gave its member countries a virtually blank check to apply force to “protect citizens”, approving just about anything shy of outright occupation. As we have noted previously, markets see the situation in the North African country as a trial run for the worst case scenario in the aftermath of a protest flare-up, so the path chosen by the major powers from here (whether that is to materially intervene or not) will be weighed up as if it were happening to a far more significant crude supplier than Libya itself (i.e. Saudi Arabia). Increasingly intense unrest in Bahrain and Yemen further complicate the geopolitical landscape.

Finally, Friday will bring the much-anticipated summit of Euro Zone finance ministers that has been widely expected to produce a so-called “grand bargain” on dealing with the debt crisis on the currency bloc’s periphery. As we discussed in detail last week, the preliminary outlines of the scheme amounted to nominal progress but fell woefully short of a true bulwark against further sovereign stress, pointing to a wave of disappointed selling across the spectrum of risky assets (and to the benefit of funding currencies, including Yen) if the final version is not substantially strengthened.

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

DISCLOSURES

News & Analysis at your fingertips.