Friday, November 19, 2010

JPY: Expanding the differential in interest rates sets the tone for the USD / JPY


Expanding the differential between the interest rates the U.S. and Japan, especially at the far end, continues to set the tone for the USD / JPY in the absence of any other drivers. At some point during the night the pair USD / JPY reached 83.65, before falling back to 83.25 back to the beginning of trading in London. It would be fair to say that this week the movement EUR / JPY had a significant impact on performance USD / JPY. As we have noted, Tokyo was almost there on currency issues for this month. Perhaps they give the rest to their ligaments after major political parties in September and October. And would gladly have looked at how the grass grows, but the pair USD / JPY very slowly moved up in recent weeks. If we see large dollar coverage by the end of the year, then we may see a continuation of this trend and a little further.

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