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US dollar near one-month high against yen
The US dollar gained versus the Japanese yen, and was almost at a one-month high. The US dollar also gained versus its other peers. There is speculation that manufacturing data in the US may be better than expected, so the economic slowdown can be averted. However, if better data is released, then the chances of the Federal Reserve introducing monetary easing are considerably lowered.
At 6:45 AM in London, the USD/JPY rate was at 78.79 yen, a gain of 0.1%. The EUR/USD rate was flat at $1.2326. The Australian dollar also registered a 0.1% fall versus the US dollar, and was trading at $1.0475. The Malaysian ringgit too fell by 0.3%, and traded in at 3.1285 ringgit to a US dollar.
Euro trading fairly flat against US dollar and yen
The euro was trading relatively flat against the US dollar and Japanese yen during the Asian trading session on Wednesday. However, the negative bond yields in the Eurozone are adding to pessimism on the euro. Additionally, if the Spanish government requests a full scale bailout for its economy, then the euro will lose value.
The EUR/USD rate was at $1.2326 at 6:45 AM London time. Experts say that the EUR/USD pair has a technical resistance level of around $1.2450. The EUR/JPY rate was 97.12 yen, slightly better than Monday’s closing rate of 97.02 yen. The US dollar will get support against the euro by better than expected manufacturing data from the US. It is interesting to note, though, that the euro has been weakening continuously in the past year.
Yen declines against US dollar
The Japanese yen declined in value against the US dollar and the euro during Wednesday’s Asian trading session. The yen’s decline would be viewed positively by Japanese exporters, as a cheaper yen makes their products more attractive.
The greenback was at a near month high against the yen, and gained 0.1% against the Japanese currency. The USD/JPY rate was at 78.79 yen. The EUR/JPY trading rate was at 97.12 yen, on the back of a marginal gain for the euro. The Bank of Japan would be pleased that it does not have to directly intervene presently to devalue the yen, as economic news from other parts of the world is indirectly making the required impact.
Oil prices fall on news of increased US crude stockpiles
Crude oil prices declined on Wednesday. This was due to industry reports which showed that US crude stockpiles had increased for the first time in three weeks. Higher supplies of oil caused by increased inventories is known to reduce oil prices. The crude oil supply in the US is now 9.4 million barrels per day.
At 12:38 PM in Singapore, oil on the New York Mercantile Exchange was trading at $92.97 per barrel, down by $0.46. Brent crude for September 2012 settlement in London’s ICE Futures Europe Exchange was trading at $113.49 per barrel, lower by $0.43.
There are also rumours that tensions with Iran would be solved through diplomacy, hence no immediate supply shortage of oil is expected.