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Flash: AUD/JPY settles back to long-term range – Westpac

FXstreet.com (Barcelona) - The AUD/JPY is slipping back towards its long-term average with the 90-100.00 range accounts for about 12% of trade since 1983.

In addition, negotiations over a free trade agreement between Australia and Japan reportedly suffered a setback as Ford announced it would close its Australian manufacturing operations just as Japan is pushing for removal of the remaining 5% tariff on imported cars. Australia’s trade minister also drew attention to Japan’s monetary policy.

According to Global FX Strategist Sean Callow at Westpac, “The yield pickup offered on AUD over JPY in the 2-year area is still trending slightly lower. While yield spreads have been a poor guide to the AUD/JPY trend since late 2012, they are not irrelevant. Japanese investors were heavy sellers of AUD bonds from late 2012 into Q1 2013 and have shown no particular interest recently to resume purchases.”

EUR/USD falls below 1.2900

The EUR/USD extended its decline and broke below the 1.2900 mark in recent dealings as better-than-expected US consumer confidence reinforced the view that the Fed could taper bond buys and triggered an USD rally.
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Flash: Yen devaluation boosts Japanese deflation prospects – RBS

According to Analyst Junko Nishioka at RBS, “Accelerated yen depreciation is starting to boost prospects of Japan finally overcoming deflation, but is also beginning to raise concerns about an adverse impact on the economy via higher costs.”
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