What’s next? – USDJPY 30.05.18

The dollar was trading 0.04 percent lower vs the yen at 108.80 as of 07:45 GMT on Wednesday, with the Italian turmoil continuing to weigh on sentiment.

Investors are weighing the possibility of Italian snap election in August, which could serve as an opportunity for anti-establishment parties to settle in power.

Safe-haven assets such as the yen tend to perform well in periods of high uncertainty and instability as market participants look for options to safeguard their money.

The political turmoil in Italy weighed on the euro, allowing the dollar to reach a 10-month high against it. EU exporters, however, favored from a cheap euro, which makes their products more competitive abroad.

The US dollar index, which measures the greenback’s strength against a basket of six major competitors, was down 0.13 percent at 94.67 by the time of this writing.

The dollar is also supported by news that a summit between President Donald Trump and North Korean leader Kim Jong Un is back on track.

The pair is likely to extend to the upside as the dollar recovers from previous days loses. The American currency remains on positive vias. If the pair breaks above 109.00, we could see an upward extension in the near term.

Ahead in today’s session, attention will be directed to ADP nonfarm employment change for May at 12:15 GMT. A fresh reading on the Q1 GDP is due fifteen minutes later, along with the goods trade balance for April. The Federal Reserve will unveil its Beige Book at 18:00 GMT.

Later on, Japan’s industrial production figures for April are due at 23:50 GMT.

FortFS