Monday, 18 September 2017

What’s next? – USDJPY 18.09.17

Posted by Valentine at 10:35 Labels:

USDJPY

The dollar/yen was 0.30 percent higher as of 05:15 GMT on Monday to trade at 111.16, with the American currency showing a moderate recovery after falling due to renewed geopolitical concerns from the Korean peninsula.

The US dollar index, which gauges the greenback against six major rivals, was trading at 91.67, 0.02 percent higher by the time of this writing.

North Korea launched a new middle-range ballistic missile that flew over Japan’s northern island of Hokkaido on Friday’s early hours. According to Kim Jong Un, the missile was a response to the latest pack of sanctions approved by the United Nations Security Council.

The UNSC held an emergency meeting to condemn the latest provocation from Pyongyang, asking all nations for a quick implementation of UNSC sanctions against the communist regime.

The dollar was undermined on Friday also by a series of downbeat economic reports. Retail sales for August showed a 0.2 percent decline against a 0.1 percent build eyed. The industrial production index fell by 0.9 percent compared to a 0.1 percent increase initially estimated. Michigan’s consumer sentiment rose to 95.3, up from a forecasted 95.1.

Ahead this week, market attention will be mainly directed to the Federal Reserve September monetary policy meeting. While the regulator is widely expected to leave its short term interest rates unchanged, traders will closely monitor Chairwoman Janet Yellen’s remarks afterwards.

According to Fed funds tracked by CME Group’s FedWatch program, market participants are currently pricing in a 42.5 percent probability of a 25 basis points rate hike by December.

The case for a third rate hike this year was supported by the latest consumer inflation report. The US Commerce Department said on Thursday that consumer prices increased by 0.4 percent in August, above expectations for a 0.3 percent increase.

The index also came in above expected values in yearly basis, exposing a 1.7 percent growth rate compared to an initially 1.6 percent increase seen.

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