Sep 06 2013

Dollar Set for Week Gain versus Euro before Job data; Yen Rises

The rumor, that Federal Reserve is going to reduce stimulus, is becoming strong as USD gets another weekly advance against Euro, at the forefront of a US report which predicts that employers are adding more jobs. Because of the figures, which are yet to come, showing a slow paced production in Germany and Spain, Euro fell versus Yen for the second day. Currency of Japan united against USD to stop the longest losing streak of four days in the last two months. For the first time ever Singapore took over Japan as the biggest Foreign Exchange Centre of Asia.

A senior Analyst, Kikou Takeda said that strength of dollar will continue as Fed has decided to go as per the plan unless and until there is a bad news. Fed policy makers are discussing over the strength of economy which allow them to cut down the monthly purchases of $85 billion in mortgage debt and treasury. A survey showed that 65% of the policy makers expect a cut down in the Fed’s meeting to be held from 17-18 September.

Treasury yields have gone up 1.43% after a low of 2.98% in November. Since July 2011, it has been below 3%. Bullish bets exceeded Bearish bets by 78,353 against Yen on 27 August. It increased to 99,769 in May.

Callum Henderson, The Global head of currency research, said the main obstacle in going ahead is that the market is significantly long dollar-yen.

Rate Range Projection by Bank

Next Week :                 98.50 – 100.50

Next 3 Months :           90.00 – 105.00