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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/jZHcyAZ5SU
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfV5wS6 https://t.co/Iw9haaHAnn
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sr63f https://t.co/raO3gCGqQ6
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/rWVlBs6H3c
  • The update to the US Consumer Price Index (CPI) is likely to sway the US Dollar during the Federal Reserve’s blackout period as the central bank braces for a transitory rise in inflation. Get your weekly $USD forecast from @DavidJSong here: https://t.co/JTuP7CLlyi https://t.co/tOvqn3Gdpc
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/s5dn4ZKnku
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACyvdZ https://t.co/6VjW5FEiQW
  • Global stocks bounce back from recent pullback as key resistance levels lie ahead. Get your weekly equities forecast from @HathornSabin here: https://t.co/wXSWo1JygD https://t.co/vWVaSEQTXT
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/9kfBu04auM
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5ddzFV https://t.co/8GJ6OQYgnW
USD/JPY Surges as US 10-year Yield Breaks Out on Strong CPI, Claims Data

USD/JPY Surges as US 10-year Yield Breaks Out on Strong CPI, Claims Data

Christopher Vecchio, CFA, Senior Strategist

THE TAKEAWAY: Headline inflation holds Fed’s +2% medium-term target in July > Concerns over Fed’s lost credibility on inflation front diminished > Weekly labor figures suggest sustained pace of hiring, improvement in labor market sentiment > USDJPY BULLISH

Although there are still several data left on the US economic calendar this week, the two timeslots that were eyed this week – Tuesday and Thursday at 08:30 EDT/12:30 GMT – came up aces for the US Dollar.

First, the US Advance Retail Sales (JUL) report on Tuesday was improved overall, suggesting the growth will remain above +2.0% in the 3Q’13. Today, it’s an August weekly jobs report and the July inflation index that are propelling US Dollar gains.

Here are the figures that have provoked the US Treasury 10-year note yield to breakout to 2.821%, its highest level since August 1, 2011 (pre-US debt debacle and ensuing ‘AAA’ downgrade):

- Consumer Price Index (JUL): +2.0% as expected, from +1.8% (y/y)

- Consumer Price Index ex Food & Energy (Core) (JUL): +1.7% as expected, from +1.6% (y/y)

- Initial Jobless Claims (AUG 10): 320K versus 335K expected, from 335K (revised higher from 333K)

- Continuing Claims (AUG 3): 2969K versus 3000K expected, from 3023K (revised higher from 3018K)

Overall, Thursday’s inflation and jobs data complements Tuesday’s consumption data neatly: they suggest that the US consumer is getting stronger, which is positive for growth. Accordingly, such data, as expressed by the surge in US Treasury yields, puts another point in the ‘Septaper’ column.

Read more: ‘Septaper’ On? US Dollar Leads as Asian-Pacific FX Slides to Start Week

USDJPY 1-minute Chart: August 15, 2013

USDJPY_Surges_as_US_10-year_Yield_Breaks_Out_on_Strong_CPI_Claims_Data_body_Picture_1.png, USD/JPY Surges as US 10-year Yield Breaks Out on Strong CPI, Claims Data

Charts Created using Marketscopeprepared by Christopher Vecchio

Following the releases, the USDJPY rallied from ¥98.22 to as high as 98.64. At the time this report was written, the pair had pulled back to 98.45. Price action was similar across the other components of the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR), with: the EURUSD falling from $1.3288 to as low as 1.3222; the GBPUSD falling from $1.5577 to as low as 1.5522; and the AUDUSD falling from $0.9144 to as low as 0.9092.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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

DISCLOSURES