By Yan Petters – Yesterday, the most fascinating economic development was clearly Japan’s move to devalue the yen. The Japanese leadership saw the yen reaching a 15-year high against the U.S. dollar and understood that severe actions must be taken to halt this bullish trend. The concern was that the strong yen will create critical damage to the country’s export industry, and as a result negatively impact the entire economy. As a result, the yen saw irregular trading, and lost about 3% of its value in a single trading day. This has provided unusual opportunities to create large short-term profits. Today, if news of continued intervention arrives, the bearish trend is likely to continue.
In addition, here are today’s leading economic releases:
• 12:00 GMT, Swiss Libor Rate – The Libor Rate is the Swiss interest rates announcement for the next month. Analysts expect that the Swiss National Bank (SNB) will leave rates at 0.25%. If the SNB will surprise and deicide to hike rates, the CHF may be boosted as a result.
• 12:30 GMT, US Unemployment Claims – This report measures the number of individuals who filed for unemployment insurance for the first time during the past week. If the end result will reach below 400,000 it is likely to boost confidence in the global economic recovery. This would likely boost risk-appetite, and as a result weaken the dollar which is considered to be a safe haven asset.
• 13:00 GMT, US Long-Term Purchases – The report measures the level of foreign investment in US long-term securities, as opposed to local investment. If the end result will beat expectations for 37.9B, the dollar may weaken as a result.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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