Thursday November 17, 2005 - 08:34:53 GMT
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CMC Markets - www.cmcmarkets.com
Dollar pauses for breath in Yen rally, US Industrial Production data awaited.
November 17th - Once again the dollar has paused for breath against the Yen as traders consolidated positions after struggling to find any meaningful direction through the Asian session. There’s been little on the economic calendar so far, although the fact that oil inventories came in largely in line with expectations yesterday – and prices are holding some way below the $60 mark - is without doubt offering a degree of support to the Yen. In the longer term however, interest rate differentials and continued foreign demand for US assets looks set to continue buoying the dollar, so unless we see the release of any surprise data then there’s reason to believe that the move on towards 120 for USD JPY may well resume. Metrics such as this afternoon’s US industrial production reading will however doubtless attract interest after last month’s contraction. Growth is expected to resume for the October period and associated economic data released so far is certainly suggesting that this will be the case, but any deviation away from expectations could end up leaving the dollar under a little pressure later in the session.
Stuart Scrase and Enis Mehmet
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