Breaking News
0

USD/JPY Up 7 Out Of 8 Trading Days

By Kathy LienForexSep 13, 2019 03:37PM ET
www.investing.com/analysis/usdjpy-up-7-out-of-8-trading-days-200464583
USD/JPY Up 7 Out Of 8 Trading Days
By Kathy Lien   |  Sep 13, 2019 03:37PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Kathy Lien, Managing Director Of FX Strategy For BK Asset Management

Daily FX Market Roundup Sept 13, 2019

Next week is the Federal Reserve’s monetary policy announcement and despite widespread expectations for the Fed’s second rate cut this year USD/JPY is trading strongly ahead of the rate decision. The pair ended the week up for the 7th out of 8 trading days. The latest economic reports beat expectations with retail sales rising 0.4% in August, which was double expectations. Consumer sentiment also improved with the University of Michigan Consumer Sentiment Index rising to 92 from 90.8.

According to Fed fund futures, the market completely discounted a quarter point rate cut and sees a 70% chance of a second move before the end of the year. Interestingly enough, these odds shifted lower over the past week because prior to that the market was pricing in a 100% chance of two rate cuts before the end of the year. Part of this has to do with stronger inflation and consumer spending numbers but some economists feel that by easing aggressively, the European Central Bank reduces the pressure on the Fed to do the same, especially if they effectively avoid a deep prolonged recession. Whether that’s true remains to be seen but in the immediate future, how the dollar trades for the days and weeks ahead will be determined by the tone of Fed Chairman Powell’s press conference.

US dollar bears could be setting up for disappointment because everything we heard from Federal Reserve officials suggests that they are reluctant to ease. Earlier this month, rate-cut expectations soared when Fed Chairman Powell said there are significant risks to the economic outlook and they would act appropriately to sustain expansion. However in that speech he also described the economic outlook as favorable, said the economy continues to perform well and the labor market is strong. A quarter-point cut will be coming because the Fed is “conducting policy in a way to address risks,” according to Powell but he could repeat the mantra that the economy is in a “good place.” Over the past few weeks, we’ve highlighted the long list of US policymakers who casted doubt on the need for easing and if the Fed remains optimistic, the dollar will rise. This includes FOMC voter Rosengren who said “no immediate Fed action is needed if data stays on track.” FOMC voter Williams also feels that the baseline for the economy is continuing strong growth and he won’t pre-judge the outcome of the September meeting. Since July, consumer spending slowed but inflation is steady and service-sector activity accelerated.

Come Wednesday, if the FOMC statement or Powell’s press conference oozes of optimism, the US dollar will rally even if the Fed lowers interest rates. If the decision to cut isn’t unanimous and 2 or more members vote to keep rates steady, we could see USD/JPY make a run for 110.

USD/JPY Up 7 Out Of 8 Trading Days
 
USD/JPY Up 7 Out Of 8 Trading Days

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Majors RTM
MRTM Sep 15, 2019 2:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
There has been more buy orders than sell orders in the last few weeks, causing the price of USDJPY to rise. If there are no buyers, the price will drop, regardless of any fundamentals.
Taslima Akter
Taslima Akter Sep 14, 2019 9:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
nice
Ramon Reis
Ramon Reis Sep 14, 2019 9:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks great report
Brian Rawling
Brian Rawling Sep 14, 2019 3:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
US$ strength or yen weakens as money exits safe haven? The retail forecast was lower than recent trends. The actual MoM figure followed the trend.
Partap Singh
Partap Singh Sep 13, 2019 9:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thank you Kathy
gopa goma
gopa Sep 13, 2019 9:11PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks kathy lien, you are the best.
KenT Tan
KenT Tan Sep 13, 2019 7:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thank! Appreciate
Aristides Mbanga
Aristides Mbanga Sep 13, 2019 6:11PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks for updates madame
Sabelo Khehla Dlamini
Sabelo Khehla Dlamini Sep 13, 2019 5:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Unanimous
Rastislav Romanec
Rastislav Romanec Sep 13, 2019 4:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
wow
Phumlani Mncube
Mlotshwa Sep 13, 2019 4:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks for updates Madam
hugo glez
hugo glez Sep 13, 2019 3:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nice post Kathy !!!
Makinda Karim
Makinda Karim Sep 13, 2019 3:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks alot for update madam..
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email