The Japanese Yen Weakens As Bernanke Is Expected To Be Confirmed In 2nd Term
Posted by adminThe JPY fell against most currencies an indication the Federal Reserve Chairman Ben Bernanke will win a second term to pursue policies for economic growth, boosting demand for higher yielding currencies. The yen slid against the euro as a U.S. administration official said President Barack Obama got reassurances from Senators that Bernanke will be re-nominated. ‘Risk aversion is fading away amid talk of Bernanke’s re- appointment,’ said Toshihiko Sakai, head of trading for currencies and financial products at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. ‘This is causing selling of the yen.’
Bernanke helped drive the global economy to recovery after the recession in 2008 triggered $1.74 trillion of losses and write-down’s around the globe. President Obama has proposed limits on the size and trading activities of financial institutions as a way to reduce risk taking and prevent another financial crisis. The USD/JPY is currently trading at 90.30 as of 7:13am, GMT, with a bullish trend.
The euro’s gain was halted on speculation that Greece will struggle to contain its budget deficit. European Central Bank President Jean Claude Trichet said in an interview last week with Germany’s Focus magazine that Greece, whose deficit has expanded to almost 13 percent of gross domestic product, has not respected the Stability and Growth Pact, which calls on members to limit budget shortfalls to 3 percent of GDP. ‘Signs of an additional increase in the Greek risk premium would likely remain a drag on the euro,’ Thomas Stolper, a London-based economist at Goldman Sachs Group Inc., wrote in an e-mail to Bloomberg yesterday. ‘There also remains the risk that other countries come under more fiscal pressures as well.’ The EUR/USD is currently trading at $1.4150 as of 7:33am, GMT, with a bullish trend.
The British pound fell against the greenback after data showed UK retail sales rose 0.3 percent last month, less than forecasts for a 1.1 percent rise ‘The figures were weaker than expected. It’s consistent with the inflation data published on Tuesday which showed that the upside in prices is not because of strong demand,’ said Paul Robinson, chief sterling strategist at Barclays Capital in London. The GBP/USD is currently trading at $1.6125 as of 7:45am, GMT, with a bullish trend.
http://www.finotec.com/
Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.
