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What’s next? – USDJPY 17.08.17

17 August 2017 02:29 PM BDT
What’s next? – USDJPY 17.08.17

The dollar/yen was down 0.24 percent as of 08:05 GMT on Thursday to trade at 109.93, as tensions between Washington and business leaders weighed on the greenback. On Wednesday, several CEOs appointed as council advisors by the Trump administration decided to move aside from the government arcs after the president said Virginia violent protest were not to blame only to white supremacists but also to human rights activists. The US dollar index, which gauges the greenback against a basket of six major currencies, was trading at 93.40 by the time of this writing, down 0.05 percent. Downbeat economic data also weighed on the American currency. Housing starts fell 4.8 percent last month to a seasonally adjusted annual rate of 1.16 million units. Today’s agenda includes Initial jobless claims, the Philly Fed manufacturing index and industrial production, as well as speeches from FOMC Kaplan and Kashkari. The pair was certainly affected by mixed July minutes from the Federal Open Market Committee. There are now two strong positions regarding future plans for interest rates and the reduction of its massive $4.5 trillion balance sheet. While some policymakers believe low inflation levels should prevent the regulator from rising rates in the near term, others insist that waiting too long to move interest rates could pose serious threats for the economy as the policy normalization process has already started. According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 46.8 percent probability of a third 25 basis points rate increase by December. Just as we said yesterday, the situation continues to be very unstable and this pair is a risky one to trade under the given circumstances. Once again we broke below the 110 mark, but remain close enough to it, making an easy return very likely. It will of course depend on how the fundamentals aligned in the short term and risk appetite evolves.

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