Friday, 28 Jan 2011

Yen Rebounds in Morning Session

The yen staged a broad recovery this morning, as the surprise news about Japan's debt rating downgrade appeares to be fading from investors memories. The EUR/JPY pair dropped 80 pips today, and is currently trading around the 112.80 level. Meanwhile the USD/JPY has fallen more than 40 pips to its current level of 82.20. Analysts are forecasting that a revival in demand for Japanese exports will likely support the yen for the foreseeable future.

Turning to the rest of the day, traders will want to pay careful attention to the US Advance GDP figure, set to be released at 13:30 GMT. Analysts are forecasting a solid increase in the GDP figure, which if true is likely to help the USD come off its recent two-month low against the euro. Should the figure come in below the forecasted 3.5%, the greenback is likely to close the week out with further losses.