Tuesday, 15 August 2017
What’s next? – USDJPY 15.08.17
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what’s next
USDJPY
The dollar/yen was up 0.62 percent as of 08:20 GMT on Tuesday to trade at 110.33, as the greenback extended gains amid easing geopolitical concerns in the Korean peninsula.
General Joe Dunford and one more US top military official visited South Korea to meet President Moon Jae-in and his defense minister on Monday. They said the Trump administration is committed to finding a diplomatic way to resolve the crisis, while assuring the US has no interest in engaging in a military conflict, although such alternative is still on the table.
The US dollar index, which tracks the greenback against a basket of six major rivals, was trading at 93.71 by the time of this writing, adding 0.43 percent.
On the data front today, players will count on July’s retail sales, export/import price indexes and August’s NY Empire State manufacturing index as of 12:30 GMT. Business inventories for June are due at 14:00 GMT. Tic Net long term transaction are scheduled for release at 20:00 GMT.
However, the main event of this week is still to come. On Wednesday, the Federal Reserve will release minutes of its last monetary policy meeting. Traders will pay close attention to the document in search for hints on the timing for the next rate hike.
According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 42.2 percent probability of a third 25-basis points rate increase by December.
Probabilities for a rate move later this year fell last week after the Labor Department said consumer prices missed growth expectations, rising 0.1 percent vs a forecasted 0.2 percent.
From a technical perspective, breaking above the 110 mark could lead to 112.50 as the next target level if risk-on sentiment continues to build up and recover from the Korean drama. On the contrary, the stability of the pair would be on the line again, pushing it below the 110 level.
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