USDJPY takes a breather after intervention rumours
The Japanese yen gets some relief, as the bears become more wary about a currency intervention. Some market participants have been led to believe Tokyo is behind the steep drop from the psychological landmark of 150. The authority’s remarkable silence may leave traders guessing. A recent buildup in officials’ remarks about the depreciation of the yen has made the market nervous, limiting its losses above a 12-month low. Any intervention, however, would be artificial unless the rate differential is reversed. This will not deter yen bulls. In the near-term, 151.80 will be the final hurdle and 146.00 will be the first support.
EURUSD weakens as fundamentals weaken
As traders place bets on the US economy’s ability to survive a rate environment that is restrictive, the euro falls. Market participants are now focusing on tangible economic fundamentals, as both sides of Atlantic have signalled a pause in the respective rate cycle. The euro will have to compete against a strong dollar, backed up by a stronger US economy with yields near 5% and a more resilient US Economy. The eurozone’s stagnation could reduce the appeal of the single money ,…
