28 May 2014
USD/JPY potential upside ahead - RBS
FXStreet (Barcelona) - Greg Gibbs, FX Trading Strategist at RBS, still sees the chance for further upside in the USD/JPY.
Key Quotes
"A weaker CNH may reflect short-term factors, and is spilling over to weakness in some but not all Asian currencies. Broader evidence of strong global asset prices supported by policy-easing measures in China and expected by the ECB suggests that other Asian currencies and higher-yielding commodity currencies are likely to remain supported."
"However, upside potential in commodity currencies is also constrained by fears on the Chinese property market and weak iron ore and steel price trends. The USD may begin to show some strength as the market projects a handing over of the policy-easing baton from the Fed to the ECB; perhaps the fall in the price of gold is evidence of this."
"For the same reason, we can see still upside potential for the USD/JPY despite premature fretting over a BoJ QE exit strategy. FX markets are in a low vol transition phase and may continue to range near term without clear direction."
Key Quotes
"A weaker CNH may reflect short-term factors, and is spilling over to weakness in some but not all Asian currencies. Broader evidence of strong global asset prices supported by policy-easing measures in China and expected by the ECB suggests that other Asian currencies and higher-yielding commodity currencies are likely to remain supported."
"However, upside potential in commodity currencies is also constrained by fears on the Chinese property market and weak iron ore and steel price trends. The USD may begin to show some strength as the market projects a handing over of the policy-easing baton from the Fed to the ECB; perhaps the fall in the price of gold is evidence of this."
"For the same reason, we can see still upside potential for the USD/JPY despite premature fretting over a BoJ QE exit strategy. FX markets are in a low vol transition phase and may continue to range near term without clear direction."