Tuesday, 26 September 2017

What’s next? – USDJPY 26.09.17

Posted by Valentine at 11:18

USDJPY

The dollar/yen was 0.14 percent down as of 05:10 GMT on Tuesday to trade at 111.56, with rising geopolitical concerns boosted safe-haven demand, including the Japanese yen.

North Korea's Foreign Minister Ri Yong Ho said on Monday that President Donald Trump declared war on his nation by tweeting that Pyongyang "won't be around much longer."

"We will have every right to make all self-defensive counter measures, including the right to shoot down the United States strategic bombers at any time even when they are not yet inside the aerospace border of our country," Ri told the press in New York.

The US dollar index, which gauges the greenback against six major currencies, was trading at 92.39 by the time of this writing, down by 0.06 percent.

Ahead in the day, attention will be directed to the speech of Federal Reserve Chairwoman Janet Yellen, who is due at 19:30 GMT. Traders will closely monitor her rhetoric concerning policy.

Last week, the Federal Open Market Committee decided to leave interest rates unchanged in a range between 1.00 percent and 1.25 percent, although it announced that in October the process to unwind its massive $4.5 trillion balance sheet will be in motion.

According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 71.4 percent probability of a 25 basis points rate hike by December.

Overnight, the Bank of Japan released its latest monetary policy meeting minutes. The document showed policymakers are sticking to the current policy framework but remained optimistic about the development of consumer prices, with the 2 percent inflation still in place.

“Most members shared the view that, although the recent developments in CPI had been relatively weak, the year-on-year rate of change was likely to continue on an uptrend and increase toward 2 percent, mainly on the back of the improvement in the output gap and the rise in medium- to long-term inflation expectations,” the minutes said.

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