The Japanese yen becomes strong, after a week where the dollar lost prominence in the Forex market against other currencies. It is time for the Yen to trace their positions.
Currencies such as the Chinese Yuan, the Euro and now, the Japanese Yen, have soared in the currency market above the dollar, as investors begin to find security in currencies other than the dollar.
The American currency is increasingly minimized against other currencies due to the turning point that the United States is going through. Analysts believe that the dollar will be uphill to recover its previous position.
Why has the dollar lost ground?
The news of the Forex market has been loaded this week with scoops on the rise of currencies other than the dollar. And this was a scenario that analysts anticipated.
Since the start of the coronavirus pandemic, the United States has been one of the countries that has taken the fewest measures to control its infections and curb the spread of the coronavirus.
To date, there are 3.7M confirmed cases in the United States.
More than 60,000 new cases of COVID-19 were reported Thursday across the United States, the highest single-day count by any country in the global pandemic thus far, discouraging some American consumers from returning to public spaces. .
This has led investors to be careful when considering investing in the dollar.
Well, the green currency had become a safe haven for investors at the start of the pandemic, but, as the other economies are gradually recovering, the dollar is gradually being displaced.
The renewed strength of the Japanese Yen
The Japanese yen strengthens, and is now on track to post its highest daily percentage gain against the dollar in about a month. Being one of the currencies that traced in the Forex market due to the weakness of the dollar.
Well, the dollar fell against a basket of major currencies. Fall pressured by a weaker United States than expected for investors.
After the statistics of the producer price index were published in Japan and the US, the Japanese yen gained against the US dollar due to the clear advantage in these figures of the Yen over the US currency, changing the direction of the interest of the investors.
Japanese data showed that the PPI increased 0.6% in June after falling 0.5% in the previous month. Prices decreased 1.6% year-on-year.
Which is understandable because there was no pandemic in 2019. These figures came a few days before the Bank of Japan released its interest rate decision.
The PPI data of the United States remained at the negative figure of -0.8%, not complying with analysts’ forecasts and generating even more uncertainty for investors, as it seems that the American currency is approaching an unfavorable environment each time. investment.
“Growth concerns haunted the markets, driving safe bets like the yen and gold.”
Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.
An uncertain future for the dollar
An uncertain future for the dollar
The dollar continues its history of losses for this week-end. Although investors looked on with encouragement as the American currency gained in Asian trading hours, it lost momentum and remained virtually flat against a basket of currencies that promised more investor confidence.
Uncertain times for the currency will last a bit longer. Well, now it is not only the anxiety caused by the coronavirus that is keeping investors away, but the primaries of the presidential candidates for the presidency of the United States are getting closer.
And international opinion is increasingly tense in the face of candidacy options. Since, Trump and Biden, do not have a very good international reception for the drastic changes that they promise to the American economic system.
Japanese Yen quote to date
At the time of writing, USD / JPY is trading at 106.89, gaining the Japanese yen against the dollar.
In summary, it is expected that the dollar will take a while to recover its previous position in the face of the outlook, and that the other currencies will generate confidence in investors to take shares.