Yen, British Pound Under Pressure | IFCM India
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Yen, British Pound Under Pressure - 25.1.2013

Japanese yen got under pressure against major currencies again. The US dollar set a new 21-month high against the Japanese yen at 90.67 during Asian trading session. The statistics on Japanese CPI dynamics, published today, showed that deflationary process is still observed in the country. The CPI fell in December by 0.1% in annual terms (previous: -0.2%), while the CPI, excluding food and energy, increased by 0.2%. Bank of Japan doubled the inflation target to 2% at the last meeting and that would require an effective and massive monetary policy easing. In the medium term the downfall in the yen seems quite probable, even in comparison with the current prices. As for foreign exchange market, it is also worth noting the continuing British pound lowering. Today will be published The UK economic growth statistics for the fourth quarter of last year will be published today. According to preliminary market estimates, the GDP could fall by 0.1% compared to the third quarter. The national currency vs. the US dollar dropped yesterday to 1.5755, the lowest level since August 2012. The GBPUSD currency within a few days earlier this week, overcame the support level at 1.5830, and then the prices kept falling amid the rhetoric of British Prime Minister - David Cameron, who said at the World Economic Forum in Davos that the continuation of political integration of the EU would be a mistake. He also declared the possibility of future referendum regarding going the Great Britain out of the EU, if further membership requires the continuing failure on the part of sovereignty. It is worth paying attention to Canadian CPI dynamics data coming out in the evening. Canadian dollar got under the serious pressure this week, amid the results of the Bank of Canada meeting held on Wednesday. Due to the more modest forecasts of the Bank in terms of economic recovery, the monetary policy tightening is moved to the longer term. The USDCAD currency pair is trading above the parity level for the first time since November of last year. In November, The inflation rate in Canada was at 0.8%, falling below the central bank target range 1%-3%.
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