US dollar to yen rushes to peaks

Posted 10 July, 2018

The US dollar is recovering after touching a 3-week bottom early this week. European currencies are on the back foot, while the Japanese yen has been sliding for the second day in a row. The US dollar-to-yen exchange rate touched an 8-week low and break the sacramental 111.00 handle. Specifically, the pair managed to come closer to the 111.30 area.

Prices are on the rise driven by the recovery of demand for the greenback and lower risk aversion. Specifically, the trade war issue is no longer an urgent one, and the global markets express careful optimism, which pushes risk assets up putting pressure on the yen being usually a safe haven.

This morning, the yen faced extra pressure from the reports about car and equipment orders in Japan. According to the preliminary estimate, the increase slowed down in June to 11.4% (14.9% earlier).

The US dollar-to-yen exchange rate has touched the psychological level of 111.00. In the near term, the greenback can be bolstered by persisting increase of 10Y state bond yield. In particular, the Treasuries change hands near 2.87%.

At the same time, the US dollar-to-yen rate shows a more restrained upward potential, in the long run, taking into account that the trade wars or if any other risks boost demand for the Japanese currency. With such scenario, the players will take profit under long dollar positions at good prices.

Previous forecast

11 July, 2018 10:30

← Large CBOE funds resume bitcoin sales – COT

The Commodity Futures Trading Commission (CFTC) released the Commitments of Traders (COT) for the week ending last Tuesday Non-commercial traders raised net short position on bitcoin contracts by 130 to 1,500. Large speculators have started lifting net positions after a 2-week decline. Net short positions recovered from the bottom recorded since March 20.

Large CBOE funds resume bitcoin sales – COT

Next forecast

10 July, 2018 12:16

Sterling stays depressed on July 10 →

The sterling stays weak against the US dollar in the first half of Tuesday. The price stands at 1.3244.  The markets still focused on the Brexit issue and UK's leaving the EU. The issue has become hot lately after David Davis, who led the talks on the exit, resigned. Specifically, he stood against Theresa May's strategy and was hardly happy to hear that the soft Brexit plan had been agreed without his participation.

Sterling stays depressed on July 10
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