What’s next? – USDJPY 12.04.18

The dollar was trading 0.15 percent higher vs the Japanese yen at 106.94 as of 06:25 GMT on Thursday, as the dollar recovered moderately on the back of upbeat inflation data.

Yesterday, the core consumer price index showed a 2.1 percent year-on-year growth for March, its best performance since February 2017, compared to a prior month 1.8 percent.

The US dollar index, which gauges the greenback against six major currencies, was trading 0.08 percent higher at 89.33 by the time of this writing.

Ahead in the day, the US export/import price index is up at 12:30 GMT. No other relevant reports are scheduled for today’s session. We believe attention will turn to political developments.

Overnight, the Trump administration warned Moscow about its position in the Syria conflict, suggesting serious military actions would be taken against Bashar al-Assad’s regime.

President Donald Trump tweeted: “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”

Earlier this week, the Republican leader told a group of reporters that “[the United States] have a lot of options, militarily. And we'll be letting you know pretty soon"

It seems investors’ focus is not shifting from US-China trade relations to US-Russia war relations. This matter could potentially be much more damaging than a trade war, therefore market players are likely to closely monitor the situation.

The pair is expected to run high on the back of higher geopolitical uncertainty. The USDJPY will be driven by fear and the Japanese yen will take the lead in that case.

FortFS