Friday, 22 September 2017

What’s next? – USDJPY 22.09.17

Posted by Valentine at 11:12 Labels:

USDJPY

The dollar/yen was 0.41 percent lower as of 07:05 GMT on Friday to trade at 111.99, as renewed geopolitical tensions in the Korean peninsula boosted safe-haven assets.

Despite Japan is a country involved in the Korean conflict, the yen is seen as one key safe-haven assets by most investors, which explains why it tends to rise in period of uncertainty.

The pair edged lower following remarks from North Korean Foreign Minister Ri Yong Ho, who said his country is currently evaluating the conduction of a nuclear test on the Pacific Ocean.

News came in only a few days after President Trump spoke for the first time before the UN General Assembly. The US leader said that North Korea will be “totally destroyed” if Kim Jong Un threats any US or allies territories.

The US dollar index, which measures the greenback against six major currencies, was trading at 91.76, easing by 0.31 percent by the time of this writing.

The pair grew earlier this week following Federal Reserve’s decision to unwind its massive $4.5 trillion balance sheet in October and as it hinted on a third rate hike later this year.

Fed’s dot plot, which displays the position of each Federal Open Market Committee member in regard to interest rates, showed that most policymakers see the short interest rate ending 2017 in a range between 1.25 percent and 1.50 percent.

As the US regulator continues to move forward with its plan to normalize monetary policy, while the BoJ insists on stimulus, it is likely that the pair will extend to the upside in the near term.

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