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Forex Flash: USD/JPY rise could portend consequences for GBP/USD – Investec

FXstreet.com (Barcelona) - Yesterday was dominated by movements in the US dollar after a quiet week suddenly exploded into life last night at the end of a day of comments from Fed officials, twitter rumors and stronger jobs numbers. Indeed, these events sparked a rally in the Greenback, which finally pushed the USD/JPY through the 100.00 barrier for the first time since 2009. This wave of US dollar strength also resulted in the recent GBP/USD resilience crumbling as it finished in the low 1.5400s.

As such, the USD/JPY has been by far the most closely watched currency pair in markets so far in 2013 after the various measures from the Japanese Central Bank earlier in the year.

According to Lee McDarby, Investec Corporate Treasury, “with this in mind it’s important to note that it was also divulged yesterday that Japanese investors became net buyers of foreign bonds recently, which would have only added to the weight of USD buying and JPY selling. Some analysts predict that the USD/JPY could rise as high as 115 and if this did materialize it would have grave consequences for GBP/USD.”

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