- The US dollar extends its losses on Friday, although the values lower.
- The Japanese yen is among the best performers of the day and week.
- USDJPY is headed for a weekly loss of close to 900 points.
The USDJPY is testing levels below 139.00 during the American session on Friday, maintaining significant weekly losses. During the last two days, the pair has lost more than 700 points.
The October CPI in the US caused strong movements in the markets that favored the yen. On Friday, USDJPY rallied as high as 142.40/50, before turning lower again to break below 140.00.
Terrible week for the dollar, outlook remains negative
The slump in the dollar and lower yields in the US saw USDJPY drop over the week from 147.15 to levels below 139.00, falling almost 6% in the worst week in years. The pair is back to August levels and clearly below the 20-week moving average for the first time since January 2021.
DXY extended weekly losses late on Friday by falling 1.12% to 106.70, the lowest since mid-August. Not even the drop in stock prices, nor the poor reading of US Consumer Sentiment are helping the dollar.
Next week, the attention will continue to be on the trend of the dollar. In the United States, the Producer Price Index will be published on Tuesday and Retail Sales on Wednesday. In Japan, the national CPI will be released on Friday and is expected to rise from 3.0% to 3.7%. “In a sign that inflation is turning broader, core inflation excluding energy is expected to come in at 2.4% yoy vs. 1.8% in September. However, the BOJ shows no signs of turning around under the Governor Kuroda. The next monetary policy meeting will be on December 19-20 and no change is expected then,” say analysts at Brown Brothers Harriman.
Technical levels
Source: Fx Street
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