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Looks like there was no reason to try to talk the yen down at the G7 meeting. It has took up considerable strength on its own. USDJPY has corrected substantially; and technically there isn't really much in the way of support gathered at its recent swing low, so I think another wave of risk selling could easily push us below 113 to test the 111.50 swing from the big move in August. The crosses have seen similar pull backs, but the heavy hitting currencies (EUR and GBP) seem to have lost more ground than the less liquid and even higher yield pairings (CHF, CAD, AUD, NZD). Interesting dynamic.
I have a conspiracy theory for this. Big traders in an effort to protect their carry trade short the most offending exchange rates (USDJPY, EURJPY and GBPJPY) to such a level where the market is still unsure of a genuine change in trend for the yen; but at the same time, enough for policy officials to leave the yen off their radars.
Clearly not plausible in such a liquid market, but fun to speculate about nonetheless.
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