- USD / JPY appreciates for the third day in a row to hit highs of 103.75.
- Investor appetite for risk hurts the safe-haven yen.
- The USD is seen between 103.70 and 105.30 for the next few weeks – UOB.
The U.S. dollar it appreciated for the third day in a row against a weaker Japanese yen, weighed down by an increased appetite for risk. The pair extended its rebound from the lows of 103.65 last week, to hit one-week highs at 104.75, before retreating to the 104.50 zone.
The yen suffers from risk appetite
The positive market mood generated by news reports on the progress of AstraZeneca’s COVID-19 vaccine launched on Monday has triggered a spike in risk in equity markets, weighing on the safe haven yen.
The main European indices have closed with advances between 1.4% and 2%, while on Wall Street the S&P 500 index adds 1.5%, while the Dow Jones and Nasdaq indices trade 1.43% and 1.56%, respectively.
Additionally, US Treasury yields rose on Tuesday, driven by recovery in risk. The yield on the benchmark 10-year bond increased for the first time in the last three days, which has contributed to the recovery of the USD during the North American session.
In the macroeconomic domain, US data has been mixed, with house prices rising beyond expectations in September, while the Richmond Fed manufacturing index has shown a greater than expected deterioration in housing activity. sector.
USD / JPY: Seen between 103.70 and 105.30 – UOB
Regarding the near-term outlook, the UOB currency analysis team sees the pair consolidating within recent ranges: “After the USD fell to 103.63, we indicated last Thursday (Nov 19) that ‘while the underlying tone still looks soft, the outlook for the USD to move to 103.18 from here is not high. ‘ That said, the sudden surge in the USD that sent it to an overnight high of 104.63 was a surprise. The slight downward pressure has dissipated and the current move is seen as the early stages of a consolidation phase and the USD could trade between 103.70 and 105.30 for now. “
Technical levels
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