Last week’s currency trading review
The EUR/JPY is swinging 200 pips daily in a strong uptrend as traders express the Euro strength vs. the crumbling Japanese Yen. With the BOJ set to target a 2% inflation target via bond purchases and publicly wanting to move the USD/JPY to Y95-100 as a fairer value of their currency. The G20 meet in two weeks and it is expected that countries will express their dismay at the politicization of the Yen strength and thepressure on the BOJ.
The EUR/USD has been in a solid uptrend as the FED remains on hold and the Eurozone emerges alive from its debt crisis more unified and seemingly a long term bet on the region. The political will invested in the EU and backed up by ECB Governor Draghi’s famous ‘whatever it takes’ comments have reduced what is called ‘tail risk’ in the market. Tail risk is the chance of a dramatic event like Spain/Italy/Greece leaving the EU or slipping into civil chaos with youth unemployment at 50%.
Currency Movement last week
EUR/USD was up +1.41% closingat 1.3643, after opening the week at 1.3451.
USD/JPY was up +2.04% closingat 92.77, after opening at 90.88.
GBP/USD was down -0.62% closingat 1.5696 after opening at 1.5793.
AUD/USD was down -0.16%closing at 1.0407 after opening at 1.0424.
This Week’s Trading Preview
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Forex Economic Data Preview
In the States; On Wednesday, weekly jobless claims forecast at 361kvs. 368k previously. Also Preliminary, NonFarm Productivity forecast at -0.8%vs. 2.9% previously. On Friday, December Trade Balance forecast at -45.8Bn vs.-48.7Bn previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Thursday the EU summit begins and the ECB meetwhere they are likely to keep rates at 0.75%. On Friday, German Trade Balancefor December forecast 0.2% vs. 0.2% previously. In the UK; On Thursday, BOE Future Governor Carney is due to speakbefore the MPC Interest Rate decision where they are widely forecast to hold at0.5% and keep the asset purchase program at 375bn. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; On Friday, December Current Account forecast at 0.24T vs.0.23T previously. In Australia; OnThursday, January Employment Change forecast at 5.8k vs. -5.5k previously. The UnemploymentRate is forecast to tick higher to 5.5% vs. 5.4% previously. On Friday, RBA MonetaryPolicy Statement.