USD / JPY below 104.00 level amid softer sentiment

USD / JPY is moving within a tight range at the start of the European session on Friday around the 103.80 level.

Following the previous day’s pullback of around 50 pips, the pair has managed to regain some positive traction on Friday and, for now, it appears to have broken six consecutive days of losing streak. The rebound is due to Optimism from the news that the Republican and Democratic leaders of the United States Senate had agreed to resume negotiations on another stimulus package for coronavirus.

Having said that, a further downward movement in the US stock markets has benefited demand for the safe-haven Japanese yen and limited any further gains for the USD / JPY pair. Global risk sentiment has taken a hit after US Treasury Secretary Steven Mnuchin asked the Fed to repay funds for COVID-19 loans to businesses, nonprofits and local governments. in difficulties.

This is due to growing concerns about the economic consequences of the imposition of new coronavirus restrictions in several US states and has fueled speculation of further monetary easing by the Fed. This has been evident by the current decline in US Treasury yields, which has weighed on the US dollar and helped to limit the USD / JPY pair.

There is no major economic data release from the US on Friday. However, events related to the coronavirus saga will continue to influence the safe haven JPY. This, coupled with USD price dynamics, should help investors seize some short-term opportunities on the last day of the week.

 

You may also like