Friday August 5, 2005 - 08:02:45 GMT
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CMC Markets - www.cmcmarkets.com
Political concerns leave Yen exposed on downside.
August 5th - Despite the recent positive US data, the dollar has remained exposed to the downside over the last few days. However, with the markets looking for further good news out of the States with the Non-farm payrolls later today, a brief respite of fortune for the dollar might be on the cards? The political uncertainty in Japan has ensured that the Yen found little support in recent trade. Plans to privatise the Japanese postal system are being seen as a key turning point in the country’s reform process and should this bill fail to be passed on Monday, then a general election may well ensue. Because of this distraction, the Yen has likely failed to capitalise on the opportunity to make another attempt on 110 against the dollar and unless the employment statistics from the US post any significant surprises, expect the JPY to find further downside exposure ahead of the weekend break. The fact that oil prices have retreated slightly may bring some cheer to the Japanese economy, but attention is still being focused on Saudi Arabia after Monday’s official accession to the throne by Prince Abdullah. Any change in oil policy could easily push crude prices to new record highs once again, in turn weighing further on the JPY, but for the time being expect a degree of churn as traders stand poised for the next pieces of directional information.
Paul Jackson and Enis Mehmet
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