Tuesday October 19, 2004 - 10:12:33 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Regional policies support yen
The lower oil prices will offer some support to the dollar and yen, although the prospects for a sustained decline in energy prices appears low. Persistent caution over the Japanese economy is likely to be offset by underlying US vulnerability. Speculation over a wider Chinese yuan trading band will also tend to underpin the yen. There will be tough dollar resistance above 109.5 and the net risks suggest that the dollar will weaken to near 108.0.
The dollar traded in narrow ranges against the yen during Monday with strong support at the 109.0 level, but little enthusiasm for pushing the US currency above the 109.5 level. The decline in oil prices and a rebound in the Nikkei index will offer some yen support and the dollar has been struggling in Europe on Tuesday. Indeed, the yen was able to break through the 109.0 level.
Japanese central bank governor Fukui stated that the economy was continuing to recover, but the remarks had little impact and there will still be some unease over Japanese trends.
Chinese exchange rate policies will remain an important focus. An advisor to the Chinese government stated that currency reform was feasible. The officials are, however, likely to concentrate on a small widening of the yuan trading band rather than an out-right revaluation. This will still offer some support to the yen, primarily through a reluctance to sell the Japanese currency.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."