Tuesday November 2, 2004 - 10:37:43 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Forex: Kerry win would support yen
The dollar will aim to secure some relief from a covering of short dollar positions, but the US currency will still find it difficult to gain much ground. The Japanese currency is also likely to strengthen if there is a disputed election result or a Kerry victory. The Japanese stance on intervention will become clearer after the US election, but it is unlikely that there will be dollar buying above the 105.0 level. The dollar will struggle to push above the 107.5 level against the yen with medium-term pressures and regional trends leading to a stronger Japanese currency.
The dollar retained a firmer tone in Europe on Tuesday with a move to 106.6 as short dollar positions were covered. Lower oil prices should offer the yen some support and there was also a Nikkei rally to a two-week high on Tuesday which should support capital inflows into Japan.
The US election result will be significant. The most likely outcome is that the yen will strengthen if there is an inconclusive result or a victory for Kerry, especially with speculation that the administration will push for a weaker dollar in Asia. The dollar would be likely to rally if there is a clear win for Bush.
The comments from Japanese officials will be very closely watched after the election. In theory, there will be a greater willingness to intervene, although there will still be major caution in the event of a Kerry victory given that the Japanese authorities will not want to provoke a reaction from the administration. There is a small possibility that the Japanese will take advantage of the US transition to push the dollar stronger, but a near-term move appears unlikely.
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."