Intraday Market Thoughts

USD/JPY Break Adds to USD Woes

by Adam Button
Jan 15, 2018 23:26

A miserable 2017 has turned into a dismal 2018 for the US dollar and Monday's breakdown in USD/JPY is a fresh reason for worry. The New Zealand dollar was the top performer while USD lagged. Japanese PPI is due up next. The Premium long GBPUSD hit its final target of 1.3820 for 330 pip gain, closing automatically ahead of Tuesday's relase of UK CPI. The week's video for subscribers is posted below.

The US was on holiday Monday but that was no respite for the dollar as it crumbled for the second day. On Friday, the euro and pound broke out while Monday it was USD/JPY as the November low of 110.84 gave way.

Comments from Estonian ECB member Hansson accelerated EUR gains and underscored the dollar's challenges. He spoke about shifting to more-hawkish ECB language and ending bond purchases cold turkey in September. It's part of the increasingly aggressive rhetoric form global central bankers.

Contrast that with the US, where the Fed is basically paralyzed until Powell takes over at the end of this month.

Looking ahead, Japan is the focus of a light Asia-Pacific calendar with PPI due at 2350 GMT. The consensus is for a healthy 3.2% rise. Later, the November tertiary industry index is due at 0430 GMT but the real focus of the day comes later with German and UK CPI numbers due out. Both are risks to the high-flying EUR and GBP.


Latest IMTs