Wednesday, 25 Aug 2010

Yen Drops From 15 year High on Intervention Speculations

The Japanese Yen slipped back from a 15 year high versus the U.S Dollar today, on speculation Japanese authorities will intervene in the markets in order to stem the appreciation of the currency which may risk derailing the nation's recovery.

Japan's currency weakened to 84.56 yen per USD from 83.90 in New York yesterday, when it reached 83.60, the highest since June 1995. The Yen depreciated to 107.20 per euro from 105.97, after yesterday reaching 105.44, the strongest since July 2001.

The EUR temporarily bounced on stronger than expected German Ifo business climate survey. The index rose to 106.7 from 106.2 instead of falling to 105.8 as expected. The EUR briefly traded above $1.2700, however it paired most of its gains in later trading, to currently trade at $1.2630.

The EUR may see another bounce today as the U.S core Durable Goods orders and New Home Sales, due to be released at 12:30 GMT and 14:00 GMT respectively, are expected to show modest improvements from the previous month. Also expecting traders today is the release of the Crude Oil Inventories at 14:30 GMT