By TraderVox.com
Tradervox (Dubline) – The Japanese currency is headed for a weekly gain against more of its major peers as speculation global economy is slowing down boosted demand for the yen as investors look for refuge. The euro is the biggest loser this week against the dollar as German report next week is forecast to show business sentiments remained lowest in more than three years. The demand for safety was also spurred by comments by an International Monetary Fund official who indicated that the organization will cut global economic forecast by few decimal points in a statement yesterday.
Junichi Ishikawa, a Tokyo-based analyst at IG Markets Securities Ltd, has noted that the market has shifted its focus from monetary policy by central banks to economic fundamentals and also predicted that buying pressure on yen will increase should data continue to confirm global economic slowdown. The business climate index report from Ifo Institute in Munich is set to indicate a slight rise on the index to 102.8 from 102.3 recorded last month when it is released on September 24. Ishikawa noted that the European economy is weak as the German data has continued to be negative for the euro, putting a lot of downward pressure on the 17-nation currency.
According to a composite index for services and manufacturing sectors, the services and manufacturing sectors shrunk the most in three years while the Chinese factory output report showed the worst contraction in eleven month. Khor Hoe Ee, an Asia Pacific Department assistant director at the IMF said that the weakening global economy has forced the organization to reduce global growth forecast by few decimal points.
The euro is set to make a drop to its 200-day MA after it failed to break about the $13178, which is the 78.6 retracement from February’s high and July’s low on the Fibonacci char. The Japanese currency have advanced by 0.2 percent this week to 78.25 per dollar. It has gained by 1.4 percent against the euro to trade at 101.47, its close yesterday.
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