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USD/JPY Weekly Fundamental Analysis – Week of May 23, 2016

By:
Barry Norman
Published: May 21, 2016, 07:20 UTC

The USD/JPY moved up over the week to close at 110.13 as traders monitored the G7 meeting over the weekend. Investors were closely watching tension

USD/JPY Weekly Fundamental Analysis – Week of May 23, 2016

The USD/JPY moved up over the week to close at 110.13 as traders monitored the G7 meeting over the weekend. Investors were closely watching tension between the U.S. and Japan over whether the yen’s strength earlier this year was sharp enough to warrant intervention by authorities.

U.S. Treasury Secretary Jack Lew has said the Japanese currency’s recent appreciation was orderly, despite Japanese authorities’ description of the yen movement as “one sided” and speculator-driven. Japanese Finance Minister Taro Aso has said that he was “prepared to undertake intervention” in the foreign-exchange market.

Despite the dollar’s mixed performance Friday, some analysts said they expect it to gain in the near term. Scotiabank said in a note Friday that the euro should weaken against the dollar “on the basis of relative central bank policy as market participants firm their expectations for Fed normalization.”

John Hardy, head of FX strategy at Saxo Bank, said in a note Friday that the dollar “continues to stand strong on the rising prospects for a Fed move.”

The dollar held at its highest in nearly two months against a basket of major currencies early on Friday, on track for a third week of gains as investors awaken to the risk of a hike in U.S. interest rates as early as next month.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

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Major Economic Events for the week:

 
Cur. Event Actual Forecast Previous  
Monday, May 23, 2016
  Canada – Victoria Day
Tuesday, May 24, 2016
  USD New Home Sales (Apr)   523K 511K  
Wednesday, May 25, 2016
    CAD Interest Rate Decision   0.50% 0.50%  
    USD Crude Oil Inventories     1.310M  
Thursday, May 26, 2016
    GBP GDP (QoQ) (Q1)   0.4% 0.4%  
    GBP GDP (YoY) (Q1)   2.1% 2.1%  
    USD Core Durable Goods Orders (MoM) (Apr)   0.3% -0.2%  
    USD Pending Home Sales (MoM) (Apr)   0.6% 1.4%  
Friday, May 27, 2016
  USD GDP (QoQ) (Q1)   0.9% 0.5%

Upcoming Government Bond Auctions

Date Time Country 

May 23 N/A UK Syndicated tap of 0.125% I/L 2046 Gilt

May 23 11:03 Sweden Sek 1.25bn 0.125% Jun 2019 I/L bond

May 23 11:30 Germany Eur 1.5bn May 2017 Bubill

May 23 12:00 Norway Details of bond auction on May 25

May 23 17:20 Italy Details of Zero‐coupon/BTP€i auction

May 25 11:03 Sweden Holds bond auction

May 25 11:05 Norway Holds bond auction

May 25 11:30 Germany Eur 1bn 2.5% Jul 2044 Bund

May 26 11:10 Italy Announces details of bond auction

May 26 11:10 Italy Holds Zero‐coupon/BTP€i auction

May 26 17:20 Sweden Details of I/L auction on Jun 02

 

 

 

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