US dollar breaks the 100¥ mark
We have been waiting for this day for quite some time now. In fact, we thought it would come a lot sooner, especially after the Bank of Japan announced its quantitative easing program last month. Nonetheless, the dollar has finally broken the 100¥ barrier, after threatening to do so on multiple occasions. It was actually the only highlight of the day, with the rest of the days happenings being far from remarkable.
The pair has been given a lot more attention of late, with many analysts feeling that the passing of the milestone would lift the US economy and inspire investors to be more aggressive in their trading. While much of the leg work that has taken place to get the pairing to this stage has been done by the Bank of Japan’s asset purchasing, the recent growth and overall performance of the US economy has also played its part. Whether or not that continues is the subject of much speculation.
At the time of writing the USD/JPY pair sits at 100.62 and appears to be slowly rising, albeit somewhat inconsistently. The last time that the greenback reached these heights was 2008, almost five and a half years ago. With the European and US markets closed there won’t be much more movement until the early hours when Friday’s trading session begins in Asia.
Once trading does begin in Asia, all eyes will turn to the AUD/USD pairing as the Reserve Bank of Australia releases its monetary policy statement. Due to a somewhat uncertain climate down under, with the Aussie looking weak in the eyes of many, investors are expected to begin distancing themselves from the pair until a clearer picture of the situation is available. The Aussie is already down 2.3% for the week, which represents a large portion of its decline of a little over 3% so far this year and was sitting at 1.0084 at the time of writing.
Elsewhere the Toronto Dominion Bank has been quoted as saying that the Canadian dollar will “tumble” to 90¢ by the first quarter of 2014, before rebounding to 94¢ by the year’s end. While this is all merely speculation, such comments from a source with as much credibility as TD will no doubt have an impact on the pairing as the article circulates.