USD/JPY Fundamental Analysis October 17, 2014 Forecast

Analysis and Recommendation:

The USD/JPY gained 15 points to reach 106.06 as traders moved away from risk on trading. As markets moved to safe havens such as the yen and gold the US dollar and equities fell. Speculation the Fed will raise rates next year as the economy improves had led to a record rally in the U.S. currency. The advance started to reverse last week after minutes of the Sept. 16-17 Federal Open Market Committee meeting showed participants said growth “might be slower than they expected if foreign economic growth came in weaker than anticipated.” Officials also expressed concern about “further appreciation of the dollar.”

The greenback tumbled the most in over a year versus the yen as a larger than expected drop in retail sales prompted traders to pare wagers the Federal Reserve will increase borrowing costs for much of next year. The Bloomberg Dollar Spot Index has declined 1.8 percent from a more than four-year high on Oct. 3, when investors were betting stronger growth than in Europe and Japan would lead to higher U.S. interest rates. Futures show the probability of a rate increase in September fell to 35 percent and to 61 percent in December 2015, making it the first instance for a likely move. The euro rebounded; a day after Germany cut its growth forecast for this year and 2015.

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 up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country Auction

Oct 20 12:00 Belgium OLO Auction

Oct 20 12:00 Slovakia Bond auction (for decision)

Oct 21 10:30 Spain 3 & 9M T-bill auction

Oct 21 11:00 Norway Bond auction

Oct 21 11:00 UK Auctions 2.75% 2024 Gilt

Oct 22 11:30 Germany Eur 2.0bn Aug 2046 Bund auction

Oct 23 11:03 Sweden I/L bond auction

Oct 23 17:00 US Announces 2/5/7Y Note & 2Y FRN auctions on Oct 28/29/30 & 29

Oct 23 17:30 Italy Announces details of BTPei/CTZ auctions on Oct 28

Oct 23 19:00 US 30Y TIPS auction

Oct 24 17:30 Italy Announces details of BOT auction on Oct 29