Money Flows to Yen as Traders Take Flight24 May 2018 by Dave Evans
Morning Report: 07.00 London
The Japanese yen is in demand as traders take fright of Trump’s treatment of the China negotiations. Dovish Fed minutes also depressed the dollar, helping money to flow into the yen. The USD/JPY is the worst performer so far, extending recent losses and down 0.55%.
Other yen pairs have continued to slide with the EUR/JPY and GBP/JPY off by 1.72% and 1.92% on the week respectively. The AUD/JPY is holding up slightly better by contrast as the Aussie holds up well.
The pound and euro slumped yesterday as economic data failed to impress. European manufacturing and services PMI largely slumped prompting the EUR/USD to slump to 1.1700. Meanwhile, the GBP/USD slumped with the EUR/GBP dropping after UK inflation increased less than expected.
The Swiss franc is in control, with the USD/CHF dropping this morning and the EUR/CHF tanking.
The AUD/USD is holding up relatively well though despite regional tensions relating to China.
Coming up today
BOE governor Carney speaks at 09.00. FOMC member Dudley speaks at 09.15.
UK retail sales follow at 09.30.
The ECB’s monetary policy meeting account minutes are released at 12.30.
At 13.30, we get US unemployment claims.
US existing home sales are at 15.00.
FOMC member Bostic speaks at 15.35.
BOE governor Carney speaks at 18.00.
Trade Idea
The EUR/USD continues to struggle in the face of worsening economic data and Italian politics. There could be further downside from here as the dollar keeps up demand.
