Risk aversion is waning slightly with the result that safe haven currencies traded within a narrow trading band during the Asian session. Analysts say that the situations in Gaza and the Ukraine have kept FX investors more jittery than the norm, however, thus the rebounds for both the Euro and Yen were limited. An FX strategist in Tokyo said that higher oil prices combined with heightened tensions are supporting both the Swiss Franc and the Japanese Yen while simultaneously weighing on the Aussie and Kiwi dollars. In the U.S., West Texas Intermediate or WTI oil surged to a 3-week peak earlier yesterday while prices for Brent crude rose in the wake of the Ukraine conflict.
As reported at 11:23 a.m. (JST) in Tokyo, the USD/JPY traded at 101.48 Japanese Yen, moving away from last week’s low of 101.09 Yen while the EUR/JPY edged up to 137.26 Yen, a gain of 0.1%. The EUR/USD pulled away from Friday’s 5-month low and was trading at $1.3524.
Economic Data May Offer Clues to Fed
Markets will turn their focus to the U.S. where a slew of economic data is scheduled to be released later today, including June’s consumer inflation and housing data, among others. Investors who are still trying to gauge the Federal Reserve’s intent to tighten monetary policy will want to use the data to assess just how quickly a tighter policy might be accelerated. Analysts expect that consumer inflation will have risen to 0.3% up from 0.2%, largely attributed to a rise in food prices.