US Dollar to Japanese Yen (USD/JPY) Exchange Rate Softer, GBP/JPY Jumps
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Last week the US Dollar went from strength to strength, rallying against the majority of its most-traded currency counterparts as several US reports came in above expected levels.
‘Greenback’ bullishness was particularly derived from the US second quarter GDP report. There was a positive revision to the nation’s first quarter contraction (taking it from 2.9% to 2.1%) and the US was shown to have recorded growth of 4.0% in the second quarter.
The pace of expansion was considerably stronger than the anticipated growth of 3.0%.
As the report upped the odds of the Federal Reserve bringing forward its timeline for increasing interest rates, the US Dollar was supported at the expense of peers like the Yen.
US Dollar strength was a little limited as the Federal Open Market Committee remained comparatively dovish at its latest policy meeting, but other upbeat US reports (including stronger-than-anticipated Services PMI, Personal Consumption and Labour Force Participation) ensured that the US Dollar retained the upper hand in the US Dollar to Japanese Yen exchange rate.
However, after Friday’s US Non-Farm payrolls report showed that the US economy added slightly fewer-than-forecast positions in July the US Dollar did falter.
In the opinion of industry expert Carl Forcheski; ‘The Dollar corrected a little bit after rising nicely over the last week or two. Today’s news probably took away some fears in the market that the liftoff in rates was inching a little closer.’
The US Dollar recovered losses over the weekend as investors bet that this week’s US ISM Non-Manufacturing Composite PMI and factory orders figures would show improvement.
On Monday the US Dollar to Japanese Yen exchange rate achieved a high of 102.7300.
The USD/JPY exchange rate was little changed after an industry expert said this of the fiscal policy adopted by Bank of Japan Governor Haruhiko Kuroda; ‘If we must depend on monetary policy, quantitative easing is a colossal mistake. The BOJ should have introduced a negative interest rate 20 years ago’.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate advanced after the UK’s Manufacturing PMI came in slightly above forecast levels.
US Dollar to Japanese Yen (USD/JPY) Exchange Rate Forecast
Overnight the Yen could fluctuate in response to Japan’s Markit Services and Composite PMI.
In the week ahead movement in the US Dollar to Japanese Yen exchange rate could occur in response to Japan’s Coincident Index, Leading Index, US Trade Balance figures, US Jobless Claims, Continuing Claims, US Consumer Credit, Japanese Trade Balance and the Bank of Japan’s interest rate decision.
With the Bank of Japan’s policy meeting drawing closer, the US Dollar to Japanese Yen exchange rate edged lower during Australasian trading. The safe-haven Yen was supported by better-than-anticipated Markit Services/Composite PMI’s for Japan.
The nation’s services measure returned to growth territory last month, rallying from 49 to 50.4. The Composite index climbed from 50 to 50.2.
As the day continues additional movement in the US Dollar to Japanese Yen (USD/JPY) exchange rate could be caused by the US ISM Non-Manufacturing Composite PMI.
The Pound to Japanese Yen (GBP/JPY) exchange rate advanced during European trading as the UK’s own services report surpassed expectations.