Home » Currencies Market Outlook (April 19): EUR/USD and GBP/USD traded under the 1.0800 and close to 1.3000 level
The Japanese yen was battered on Tuesday as further upside in global bond yields exerted pressure on G10/Japan interest rate differentials. The low-yielding safe haven currency’s investment appeal began to wane when it hit new highs against the US dollar, with USD/JPY surging nearly 1.4% above 128 yen per dollar for its strongest showing since early 2002
The muscle shown in the pairs USD/JPY helped the US dollar index hit 101.00 for the first time since March 2020.
The EUR/JPY and GBP/JPY also saw sharp upside on Tuesday, with both pairs rallying 1.5% and 1.3% to multi-year highs in the upper 138s and mid-167s.
Japanese politicians have been complaining about the negative impact of yen weakness for a while now, but the Bank of Japan is not likely to change its policy stance any time soon.
The EUR/USD and GBP/USD both traded broadly flat just under the 1.0800 and close to 1.3000 level, with a strong demand from investors for safe haven currencies as they awaited updates on Russo-Ukraine war tensions that could fuel further moves up or down in value depending upon who wins the struggle between European Union nations versus Russia.
The USD/CAD was supported by a sharp pullback in crude oil prices, reversing an earlier dip under 1.2600 to end the day closer to its peak at just over 1.2620. As traders wait out these fluctuations they must remain wary waiting for Wednesday’s release from Canada’s CPInflation figures which will provide some insight into how inflation may be affecting consumers’ purchasing power.
The AUD/USD rebounded about 0.4% to the 7375 area, having bounced at its 50-Day Moving Average in recent weeks; while NZD/USD traded flat near 6730 and remains close for strong support levels around that level which it hit on Monday around quota 6700.