Jan 31 2014

Yen extends rally versus euro and u.s. Dollar

The yen strengthened 0.7 percent to 102.04 per dollar at 5 p.m. in New York for a 3.1 percent monthly advance that was the biggest since April 2012. The dollar rose 0.5 percent to $1.3486 per euro, pushing monthly gains to 1.9 percent, the most since February. Japan’s currency appreciated 1.2 percent to 137.63 per euro, having strengthened 5.2 percent since Dec. 31. 

 

“Risk-off bias is again more prevalent heading into the weekend, supporting the Japanese yen and the U.S. dollar,” Robert Lynch, a currency strategist at HSBC Holdings Plc in New York, wrote in a client note. In emerging-market currencies, “there’s been no real improvement and, on the contrary, increasing indications of contagion into other currencies such as the Hungary’s forint, Polish zloty, Chilean peso, which are making new lows.”

 

The yen extended monthly gains against emerging-market currencies as growing volatility amid a selloff spurs investors to reverse carry trades while seeking haven assets.The euro fell to its lowest level versus the dollar since Nov. 22 as a report showed U.S. consumer spending climbed more than forecast in December, diverging from European inflation data as the region’s monetary policy makers meet next week. The currencies of Chile and Hungary dropped against the greenback, extending an emerging-markets rout that began Jan. 23.

 

Rate Range Projection by Bank

 

Next  week           101.50  -  103.50
Next 3 months      101.00  -  107.00