Key numbers from US, Japan, set to keep currency markets active ahead of weekend break
July 12th - With the latest US trade deficit data due today and the key rate verdict from the Bank of Japan on Friday there’s going to be no shortage of numbers to ensure major currency pairs find direction as we run towards the weekend break. Expansion of the US balance of trade will likely do little to help support the dollar in the near term and with the currency already trading at lows that haven’t been seen for around a month, there’s some speculation that a break towards 2006 lows could now follow. Equally the Yen has been trending higher against the dollar over the last two weeks and although part of this is doubtless in anticipation of a rate hike out of Tokyo at the end of the week, assuming a quarter point is added again further upside could be seen - especially depending on the precise nature of the accompanying comments, plus the message that emerges from other interim economic announcements. With industrial production and capacity utilisation numbers for May also due from Japan tomorrow there’s certainly the scope for further volatility but unless there are suggestions that the US economy is still showing signs of expansion, the greenback may expect further pressure as we move through July.
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