Yen Slips against the Majors

The Japanese Yen saw a bearish trading session yesterday, losing ground against most of its currency crosses. The JPY fell against the USD and closed at 88.20, while the EUR/JPY cross rose to around 132.85.

The yen was under pressure for the second straight day after the Bank of Japan said this week it would further ease monetary policy in order to combat a surging yen and dropping prices. The dollar fell to a 14-year low of 84.80 on Friday. Japanese officials then had mentioned intervention as a possibility in order to weaken the yen. But this week's action plans to offer about 10 trillion yen ($115.8 billion) in short-term loans to commercial banks to boost liquidity and maintaining the key interest rate at 0.10% could help weaken the yen without resorting to selling the currency. 

Has the Yen's Bullish Trend Reached its End?

The Yen underwent a trend reversal during last week's trading session. The Yen dropped against all the major currencies, including the Dollar, the Euro and the Pound. The Yen saw its sharpest slide against the Pound as the GBP/JPY pair rose by 600 pips and is currently trading around the 148.30 level.

The Yen's downtrend came as a result of the negative Japanese economic data which was published last week. The Preliminary Industrial Production report for October rose by 0.5%, failing to reach expectations for a 2.5% rise. In addition, the Japanese Capital Spending report, which measures the change in the total value of new capital expenditures made by businesses for this year's third quarter, dropped by 24.8%. This has shown that the Japanese economy has yet to recover from the recession, and that recovery may take longer than expected. Also last week, the Bank of Japan (BoJ) decided to leave Interest Rates at 0.10%, the lowest rates in the industrial world. This has also contributed to the weak Yen.

As for this week, a batch of data is expected from the Japanese economy. Nevertheless, traders are advised to follow the Core Machinery Orders report scheduled for Wednesday. This is a leading indicator of production, and if the end result will be negative as well, the Yen could be further weakened.

Dollar Falls after Bernanke's Speech

Depreciation of the dollar after Bernanke's speech

Bernanke did not suggest in his speech to the timing of any expected interest rate hike, although there is a need to determine the timing of the tight monetary policy after the introduction of central bank liquidity into the economy during the financial crisis last year. The U.S. economy is still at the stage of recovery, with a high unemployment rate to 10%. At present, there is a lot of concern about inflation and thus diminishing opportunities to raise interest rates in the near future.

Federal President's remarks helped to support the euro / dollar, which led to the suspension of the dollar, which began on Friday after better-than-expected reading, which stated the report of the Employment Non-Farm. This has required significant decline in other currencies against the dollar, which traders have their purchases of these currencies, which increased the momentum of the bearish price movement of currencies. But today, we have witnessed a long-term upward trend as the euro rose strongly against the dollar.

The pair is trading now at 1.4840 after it was directly below the level of 1.4800 before Bernanke's speech. At the beginning of the day, the EUR / USD traded at its lowest level in five weeks. The pound fell against the dollar circulates at the level of 1.6452, down from the opening price at the level of 1.6476.

Canadian dollar will be the focus of traders during the trading day, which will be announced on the Bank of Canada interest rate decision which is expected not to change this time, will be announced on the accompanying statement of the interest rate decision. This may include the explanatory statement of any hints of the future direction of monetary policy in Canada. May go negative tone in the statement accompanying the rate decision of Canada to pay U.S. dollar / Canadian dollar to fall more towards the 1.0400 level today.

The Australian dollar bounce before U.S. jobs data

The Australian dollar bounce before U.S. jobs data

Yesterday after a steep drop against the dollar and Australian dollar recovered today is moving towards another weekly rise against its U.S. counterpart as likely to report employment figures and appropriate job in the world's largest consumer of energy, increased demand for commodities related to the dollar.

The Australian dollar clawed back some losses yesterday against the U.S. currency, which is still positive in the comparison of weekly versus the dollar has benefited from the presence of a strong risk appetite in the beginning of the week when concerns about the state-owned investment agency Dubai International cooled, and the UAE Central Bank affirmed that will not be back debts. On the day the decline in commodity markets yesterday, which negatively impacted on the prices of the Australian dollar, but today, employment in the United States, a report is likely to indicate an improvement in working conditions and forecasts reduced employment opportunities in the lowest level in more than a year, which indicates to end up in the direction opposite employment trends that may lead to a higher risk appetite among traders.

Australia is still very attractive and data on employment in the United States will be necessary to identify trends between these two currencies, according to most specialists. Australian dollar despite the appeal and consider the chain to raise interest rates, has its U.S. counterpart as well as become more attractive, and end the long march to the Australian dollar.

Office of the Inspector General / USD at 0.9249 in circulation as of 10:11 GMT from 0.9131 on Monday. Office of the Inspector General / trading at 81.58 yen from 79.03 at the beginning of the week.

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Bullish Dollar on Rate Bets

United States DollarThe the U.S. dollar and reached the highest level in a month against the common European currency, as well as gained in all the options for high-yielding currencies and pessimism returned to the stock market and betting that interest rates in the United States would lift up.

After the employment report, which turned market sentiment last Friday, the dollar found support for the rally strongly against the commodity-linked currencies such as the Australian dollar, and the options available in the emerging market, such as the Brazilian real, both which have risen more than 20 percent against the dollar in 2009 . Stock markets Shares in Dubai Mercantile Exchange today as it touched the lowest level since July, and speculation that lower borrowing costs in all parts of the world has created a new asset bubble brought risk aversion to higher levels of this month, according to speculation that the days bearish for the dollar may end, since the difficulties that may be of interest rates by the Fed (ie, sooner than was expected by noon on Friday after a positive report.

And began a wave of risk aversion in the Middle East combined with the positive feelings towards the new interest rates in the United States is fueling the dollar appeal in the commercial market was not a way for several months, the dollar could make further progress if such feelings gains confidence among dealers.

Euro / dollar traded at 1.4806 as of 11:15 GMT the opening of the price of 1.4877 yesterday. Office of the Inspector General / trading at 0.9084 dollars from 0.9136.

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Pound Down on Weaker than EU Outlook

The pound started the week down versus the euro and the U.S. dollar as sentiment towards other wealthy nations in the world remain more positive than the U.K.’s economic perspectives, forcing investors to abandon pound priced assets to inject capital in more attractive currencies backed by fast recovering nations.

After a Moody’s report featuring world’s wealthiest nations in which the U.K. was rated as ”resilient” against better rating of its European neighbors, France and Germany, considered “resistant”, the pound tumbled further versus the euro, and also went down versus the greenback as the interest rate outlook in the U.S. changed, with speculations suggesting hikes for the mid-term future, forming a winning pattern on the dollar charts versus most of the 16 main traded currencies. Despite the U.K.’s evidences of economic recovery, the process has been slower than the resilience perceived overseas, in emergent countries and commodity exporter nations like Canada or Australia, whose currencies have been gaining consistently versus the pound in 2009.

The outlook for the pound remains negative as investors opt for higher-yielding options in risk fueled sessions, and prefer to take safer bets in moments of strong risk aversion, leaving almost no appeal for pound-priced assets, which are likely to remain less attractive than average at least until the end of the year.

GBP/USD traded at 1.6335 as of 10:15 GMT from a previous rate of 1.6470 in the intraday. EUR/GBP traded at 0.9092 from a previous rate of 0.9042.

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