FOREX weekly out look

Yen Roars back into favor

Last week’s currency trading review

The Dollar was mixed to stronger against most currencies except the Yen which took back all of Non Farm Payrolls gains during the week. Data was a lot weaker than expected with US retail Sales down -0.1% vs. 0.8% forecast and August UoM Consumer Confidence slumping to 63.2 vs. 68.5 forecast. The Fed Meeting was a non event with a slight improvement in economic outlook being countered by a slight extension of the Treasury buying program with the net result neutral for the Dollar. The Euro was volatile as the USD strength story falling apart given the US retail sales disappointment on the same day the German and French GDP turned positive. Stock weakness on Friday pressured the pair onto the back foot with heavy EUR/JPY selling clouding the outlook. The EUR/USD gained 0.14% closing at 1.4202, after opening the week at 1.4181.

The Japanese Yen saw nothing but strength for nearly the whole week as US data underperformed and a series of heavy losses on the Shanghai Stock Index forced the USD/JPY back to below 95. AUD/JPY was also hit hard as the markets risk barometer slid 3%. CAD/JPY lower on the commodity slump fell 4%. The USD/JPY closed down -2.78% at 94.91 after opening the week at 97.55. The GBP continued on the downside slide that began last week with risk aversion and GBP/JPY dragging the pair towards 1.6400 supports. The BOE Inflation report was bearish as forecast although the pound did find support as the pull back from 1.7000 entered oversold territory. RICS House Balance improved to -8 from -17 in July. GBP/USD fell -0.86% closing at 1.6540 after opening at 1.6683. The AUD slumped with stocks after heavy AUD/JPY selling hit the markets on Friday Night. Earlier in the day fresh Year highs were seen on the back of RBA governor Stevens speaking about the need for rate rises as soon as conditions normalize. NAB Business Confidence rose to 10 from 4 previously and Consumer Confidence rallies another 3.7% in August. The AUD/USD closed down -1.27% at 0.8325 after opening at 0.8431.