- The US dollar endured a roller coaster session yesterday, rallying initially before retracing. The move can be blamed on several factors, including corporate month end related flows. The Japanese yen came under fresh pressure yesterday with USDJPY trading through 160, aided by quarter end flows, pushing the pair to levels not seen since 1986. The decline in the currency prompted fresh speculation that the government would step in again to support the ailing currency. Masato Kanda, Japan’s vice minister of finance and currency chief, yesterday said that officials are monitoring the foreign exchange markets with a high level of urgency and would take appropriate steps as needed.
- The euro slipped further against the greenback yesterday pushing EURUSD to test 1.0670 before recovering. Political uncertainty in France continues to weigh on the single currency but the pair has so far held above the key support at 1.0650. France will remain under the spotlight in the coming days as we await the release of the May inflation report tomorrow ahead of the first round of elections this weekend.
- The lack of UK data is keeping the pound sidelined, with GBPUSD dropping below 1.2620 yesterday before recovering a little. The pair currently sits towards the bottom of its recent range seeking direction, with the only event on the docket today being the release of the BoE financial stability report and minutes of its financial policy committee.
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