The Yen is retreating
28.07.2015
On Tuesday morning, the USD/JPY pair is growing: today begins a two-day meeting of the US Federal Reserve and investors prefer not to risk it.
The Japanese Yen retreats on Tuesday morning. The previous four trading sessions went mainly in favour of the yen - under the technical directed motion.
So, today a two-day meeting of the US Federal Reserve has started. Around it are many rumours and speculation, some write about "information leaks" regarding the rate, others prefer to wait for the facts. Today there will be no news on this, and the market will continue to save energy before tomorrow's press conference. From the Fed everyone is waiting for specifics on the matter of time frames for the rate increase. Earlier in July, Janet Yellen, the Fed chairman, said that the regulator is committed to raise the rate "sometime" this year. It would be good to get a more accurate guidance.
The labour market allows for a rate raise. Inflation is rather weak, but it is possible to wait indefinitely for it to stabilize - it is practically never ideal, as it has a pending character.
Another thing is that the Fed rate increase - especially if it is not going to be singular - will hit all developing economies without exception. The probability of a monetary storm is already incorporated in the current market price, but exactly how the situation will develop, no one can say for sure.
The greatest risk at the moment is present from the Chinese economy. Sales yesterday perfectly illustrate what will happen to the capital markets, if China does not keep the GDP growth that investors have accustomed to. Nobody is waiting for an economic breakthrough, we are talking about how to maintain annual economic growth rate above 7%. It will be difficult.
RoboForex Analytical Department
The Japanese Yen retreats on Tuesday morning. The previous four trading sessions went mainly in favour of the yen - under the technical directed motion.
So, today a two-day meeting of the US Federal Reserve has started. Around it are many rumours and speculation, some write about "information leaks" regarding the rate, others prefer to wait for the facts. Today there will be no news on this, and the market will continue to save energy before tomorrow's press conference. From the Fed everyone is waiting for specifics on the matter of time frames for the rate increase. Earlier in July, Janet Yellen, the Fed chairman, said that the regulator is committed to raise the rate "sometime" this year. It would be good to get a more accurate guidance.
The labour market allows for a rate raise. Inflation is rather weak, but it is possible to wait indefinitely for it to stabilize - it is practically never ideal, as it has a pending character.
Another thing is that the Fed rate increase - especially if it is not going to be singular - will hit all developing economies without exception. The probability of a monetary storm is already incorporated in the current market price, but exactly how the situation will develop, no one can say for sure.
The greatest risk at the moment is present from the Chinese economy. Sales yesterday perfectly illustrate what will happen to the capital markets, if China does not keep the GDP growth that investors have accustomed to. Nobody is waiting for an economic breakthrough, we are talking about how to maintain annual economic growth rate above 7%. It will be difficult.
RoboForex Analytical Department
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.