Last week’s disappointing American employment figures saw the US Dollar dip against the Yen, despite the latter currency broadly softening following the Bank of Japan’s decision to adopt unprecedented stimulus methods at its latest policy meeting.
The US Dollar Exchange Rate was trading in the region of 99.4200 against the Japanese Yen as of 11:00 pm GMT
Although the ‘Greenback’ swiftly continued its advance against its Asian rival, it was halted once again following the Atlanta Fed Conference. At Tuesday’s conference Federal Reserve Chairman Ben Bernanke asserted: ‘Today the economy is significantly stronger than it was four years ago, although conditions are clearly still far from where we would like them to be’.
After his comments the US Dollar slid slightly against several of its rivals, allowing the Yen to rebound from a four-year low.
Although some industry experts are concerned that this evening’s release of minutes from the FOMC’s latest policy meeting could trigger additional Dollar declines, others are expecting the US currency to maintain a bullish relationship with the Yen, perhaps trading at over 100 Yen per Dollar in the days ahead.
One analyst commented that while the droop in Dollar/Yen ‘highlights the importance of the next line of key targets, there remains little evidence of a sustained reversal at this point.’
He added that the ‘overall upside bias [for USD/JPY] is intact’.
However, some industry experts are forecasting that the US Dollar could come under selling pressure in the hours ahead if the FOMC minutes are dovish in tone, something which seems likely given recent pieces of disappointing US data.
A dovish attitude would increase the odds of the Federal Reserve maintaining current stimulus methods for the foreseeable future, a circumstance which could weigh on America’s safe-haven currency.
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