The safe haven Yen edged lowered and struck a fresh 10-day trough versus the greenback following the release of upbeat economic data from the U.S. and on growing hopes that a diplomatic solution will be found for the Ukraine’s geopolitical problems. Investors’ concern over Ukraine are being alleviated as talks conducted among the Ukraine, Russian, E.U. and U.S. governments attempt to bring some solace to the area. In the U.S., labor data showed that new unemployment relief claims fell to a pre-recession level while the manufacturing sector of the mid-Atlantic region edged higher this month, all of which are helping to dispel investor uncertainty.
As reported at 1:28 p.m. (JST) in Tokyo, the USD/JPY pair traded higher at 102.39 Yen, moving well away from the recently struck 3-week trough at 101.32 Yen. Since striking a high of 104.13 Yen earlier this month, the greenback has now been able to eke out a 32.8% retracement of that decline; resistance is likely pegged at the 50% retracement point which is at 102.73 Yen. The EUR/USD was relatively unchanged at $1.3814 and is likely to stay range bound given the closure of a number of global financial markets for the Easter holiday.
Investors Wary of ECB Easing
Just last month, the Euro had struck a 2½ year, but the pressure on the common currency has been ratcheted up as several members of the European Central Bank’s monetary policy committee have suggested that the too strong Euro was likely to derail the economic recovery, which is already fragile. Investors took the comments as strong hints that further easing would otherwise be forthcoming and understand that the ECB is closely watching for persistent signs of Euro appreciation.