UBS: The dollar is heading for a difficult 2018

The US currency will most likely be disappointing next year against the euro, despite the expected continued interest rate hike by the Fed, according to experts from UBS.
The Fed is expected to raise the interest rate three times in the following year. Traditionally an increase in interest is assumed to be good for the US currency, so the forecast is a bit surprising.
Since the beginning of the year, the euro has risen by 11.5% against the dollar.
The financial institution's strategists believe that, fundamentally, the euro remains cheap and a better performance of European economies should channel a further appreciation of the single currency.
The bank expects the dollar to perform well against the Canadian dollar and the Japanese yen next year. The outlook for inflation in Canada remains weak, so the recent appreciation of the Canadian currency may have exhausted its strength.
Strengthening the power of the current Japanese Prime Minister will most likely trigger a further policy of incentives and low interest rates by the central bank. So, the weakness of the Japanese currency is likely to continue with full force, according to UBS.

Wells Fargo: Short-term weakness of USD/JPY

Wells Fargo Securities chief strategist Erick Viloria predicts further weakness of the dollar against the yen in the short term in an interview with Bloomberg.
The reason for these expectations is the political uncertainty in Europe and other parts of the world that can make investors look for the yen as a safe haven.
The head of the Japanese central bank said on Thursday that the institution will continue its accumulation policy until the inflation targets are met. This is happening in an environment of rising interest rates from the Fed, which makes the situation favorable to the dollar against the yen.
Nevertheless, Viloria points to the previous few interest raises, in which market participants "bought on rumors and sold on news". That is to say, that the difference in the policies of the two central banks - the US and the Japanese - is already calculated in USD/JPY trading levels.

UOB remains in short positions in dollars

Forex strategists at the UOB Group believe that in the coming weeks, the probability for testing the level of $108.00 on dollar/yen will fall.
While the bank's analysts say that 108.00 is very strong support and is unlikely to pass the level so easily, the strong rally over 108.11 was unexpected. The upward movement has the potential to expand, but the pace of each recovery is expected to be slower, analysts said. Therefore, strong resistance above 109.30 will not be a surprise, with the next resistance at 109.80 being unlikely to be tested in the coming days.
The bank's stops at their short positions are at 109.30, as the move above this level will not be a surprise, the bank said. According to analysts, the probability of a new test is increased to 108.00 or lower. Otherwise, the chances of a downward break will continue to decline, experts write.

USD/JPY continues to fall

If the EUR/USD pair after the publication of an interview with Trump is growing, but remains within the usual dianpazon, in USD/JPY the discontent of the President from the strong national currency and sympathy to the policy of low interest rates leads to a decline to new lows, say analysts.
With the start of the Asian session on Thursday the pair has not undergone significant changes, as there were offers for purchase at 108.80 and the balance of risks remains in favor of a reduction to 107.86 (61.8% of the growth from 11/11/2016).

TD Securities prefers to stay in the camp of bulls for the dollar

Asked whether the glass is half empty or half full, and whether the current consolidation of USD/JPY has paused, strategists at TD Securities adhere to the camp of optimists.
In the bank noted that the pair remains above the important support near 110 and it is expected that the statistics from the US this week will support bulls in US currency, especially if the yield on ten-year government bonds remain above 2.3%.
In TD Securities connect strengthening of the yen in recent times with the activities of hedgers and repatriation of capital by Japanese investors and expect that the started a new financial year in Japan will lead to a negative character for the Japanese currency.
At the same time the positive signals from economic reports are expected to contribute to increased overall risk appetite, as their weakening last week also affect the yen.
In TD Securities advised to use attempts to reduce the USD/JPY to 110 for tactical purchases with expectations for growth to 113.50, as the bank adhere to forecast for second-quarter level of 114, but expect a return to 112 and 110 over the next two quarters.

The dollar was volatile against the yen after the US attacks on the Syrian airbase and NFP

The dollar fell in price against the Japanese yen on Friday morning after the US fired cruise missiles, striking at the airbase in Syria and provoking concern about the sharp escalation of the Syrian conflict.
President of the United States Donald Trump on Thursday said that he ordered to launch missile strikes on the Syrian airbase, with which a lethal chemical attack was carried out.
The dollar index to the basket of six major rival currencies by 6 am GMT fell by 0.08 percent to 100.59.
Against the yen, which traditionally grows during geopolitical tensions and risk aversion, the dollar sank by 0.3 percent to 110.45 yen.
However, after positive NFP dollar managed to climb to daily highs at 111.37.

UOB: Chances for a breakthrough of USD/JPY below 110.00 fall substantially

In light of recent changes in the price of USD/JPY, the pair can reach the bottom near the psychological level of 110.00, suggest currency strategists at UOB Group.
The major support at 110.00 still remains as the dollar rose sharply from the minimum at 110.15. The further expansion of the correction to 111.50 seems likely, but it has strong resistance level and a break above this level is a low-probability. Support is at 110.75 and then at 110.40.
Support key level of 110.00 helped the Bulls to gather strength indicating a sharp recovery in the dollar from the minimum at 110.15. The recent downward pressure lose weight but needs the dollar to break above 111.50, to show that it has formed a short term bottom. In other words, it is too early to expect a sustained recovery, although a break below 110.00 is unlikely, analysts say.

Dollar up

On Thursday, the dollar gained in price against the basket of other major currencies against the background of the weakening of the euro.
The US dollar index, which shows the strength of the dollar relative to a basket weighted by trade from the six leading currencies, increased by 0.21% to 100.00.
On Monday, amid the failure of Donald Trump's bill on medical reform, the dollar index fell to 98.67, the lowest level in four and a half months.
The withdrawal of the bill increased fears in Trump's ability to realize his economic policy, including tax cuts and increased spending on infrastructure projects.
The EUR/USD slipped by 0.27% to 1,0784, retreating from the high of 1.0905, fixed on Monday, for four and a half months.
The euro fell as a result of yesterday's trading session after Reuters reported that officials of the ECB are wary of making any changes to the statement on monetary policy in April. The fact is that the previous ECB statement as a result of the March 9 meeting was misinterpreted by the markets.
In a previous statement, ECB officials recognized the improvement in the eurozone economy, which led to increased expectations about a reduction in the financial incentive program and a possible increase in the interest rate.
President of the Federal Reserve Bank of Chicago, Charles Evans, said on Wednesday that he supports a further increase in the interest rate this year. This increased demand for the dollar.
The dollar slightly changed against the yen: USD/JPY was at the level of 111.03, recouping further from the minimum of four weeks 110.10, reached on Monday.

Goldman Sachs: Investors have become more favorable for the euro

Currency strategists at Goldman Sachs have identified a change in the behavior of market participants amid recent signals and raising forecasts by the ECB and a warning that in the absence of deterioration in the nature of incoming data in the coming weeks, the rhetoric of central bank may become more confident.
At Goldman Sachs believe that the ECB is too optimistic in their forecasts for economic growth and inflation, there is potential for further adjustment of ECB policy.
Bank analysts believe that the recovery of the euro will be felt in the crosses (Fed factor is eliminated) and retain their quarterly forecast for EUR/GBP at 0.90 level and at the level of 127 for EUR/JPY.

Deutsche Bank: Details of what will be the growth of the dollar against the yen

The upward trend in the pair USD/JPY is unlikely to go smoothly. It should contain smooth adjustments, analysts said. As demonstrated by the December report of the State Pension Investment Fund of Japan (GPIF), Japanese investors will provide strong support for the USD/JPY close to the level 110.00, but it is unlikely that they will act as a driving force that will allow prices to go above 115.00 in the near future, for example if the Fed raise rates in March, the course may briefly rise above indicated resistance, but then there is a likelihood of downward movement, according to analysts.
Nevertheless, they support the view that in long-term USD/JPY will go up after the increase in interest rates in the US. American economists of the bank expect that the Fed will raise rates this year in March, June and September and 3 more times next year. This will be the determining factor for the upward movement of USD/JPY.
The exchange rate of USD/JPY should be increased to 115 after the increase in interest rates in March and then to gain a foothold in the range of 115-118 after the increase in interest rates in June and break above 120.00, due to higher interest rates in September.

Consolidation of the US dollar

The US dollar remains under pressure despite modest gains against the euro and the yen. USD/JPY rose to 112.50 during the American session, but eventually again the couple was dragged down and fell below 112 before settling slightly above that level. The only data published in the US yesterday were the trade balance in December, which showed that the deficit rose to its highest level since 2012.
The British pound made growth that has wiped out any downturn in the day after comments by the Bank of England, according to which, based on the current trend of inflation the bank may increase interest rates.
As the euro traded at lower levels against the dollar and fell to 1.0650, at the end of the day the single currency managed to erase some of the losses and ended the day at 1.0682. The initial decline was driven by a decline in German industrial production, which fell by 3% in December while investors had expected an increase. Turmoil in Greece also contributed to the decline of the euro as a 10 year bonds jumped by 8%.

The dollar fell after Trump fired Attorney General

The dollar has fallen in price on Tuesday during the Asian trading session, after yesterday the US president Donald Trump fired the Acting Attorney General Sally Yates, who ordered the Ministry of Justice lawyers not to embed Trump's ban on immigration, and the Bank of Japan left policy unchanged, as expected, but raised its forecast about growth.
Trump has appointed Dana Boente, Attorney for the Eastern District of Virginia, to the position of Yates, the White House press secretary Sean Spicer wrote on Twitter.
USD/JPY was trading at 113.56, down by 0.18%, while AUD/USD rose by 0.13% to 0.7565. The US Dollar Index, which shows the strength of the dollar against the trade-weighted basket of six major currencies, fell by 0.08% to 100.34.

UOB sees range for the yen

USD/JPY consolidates and this will continue over the next 1-3 weeks, according to currency strategists at UOB Group.
While the couple is moving to the top of last Friday at 115.45, it is not expected to rise above that level, analysts say. The dollar reached a peak of 115.61, but quickly fell from the top, reaching a minimum, they added.
At the same time, positive expectations weakened slightly, but it is too early to expect a sustained rebound. The bank switched to a neutral stance and expressed the view that the recovery of the US dollar may move to 115.45/50, but it quickly came back.
Inability to break up is not surprising, so that the bank continued to maintain a neutral position and expect the dollar to trade in a wide range.

BTMU don't believe in sustainable growth of the yen

BTMU currency analysts expect that the yen will lose up momentum for next month. The yen has stabilized after receiving support from the press conference of the newly elected US president Donald Trump which focuses on strengthening the protectionist trade policy.
The correction of the yen so far this year has been relatively small compared to its sharp decline, seen at the end of last year, analysts say. At this stage the bank analysts believe that the weakening of the yen is likely to be temporary and will be seen only in the short term. This will require a reversal in terms of initial optimism, the analyst added.
After Trump took office there was a rally. For comparison, the wave of optimism of investors who welcomed the introduction of Abenomics at the end of 2012, continued until 2014, experts write.

US bulls with new rally

The US dollar continued its bullish run after the Fed raised interest rates. The greenback reached its strongest level in 14 years. For the last three months the dollar index rose by 3%, and for the last 4 months - by nearly 10%.
USD/JPY passed the barrier of 118 and now investors expect next target of 120, so as parity of EUR/USD. Janet Yellen gave a forecast for the new three raises of interest rates next year. This to some extent would lead to major problems for central banks around the world, including higher costs for debt service, higher inflation and falling of exchange rate. Emerging markets were hardest hit by capital outflows in search of higher yields and higher costs for servicing of dollar-denominated debt. In combination with the weak euro, yen and other major currencies this may have negative effects on the world and lead to slower growth, which will eventually overtake also the US economy.
Currently the strong dollar poses a major risk for the US economy, especially in terms of raising interest rates in the country. If the administration of Trump did not come quickly with a major fiscal stimulus package, the euphoria will fade and this will be the beginning of fluctuation for the US economy.

Dollar at 14 years peak after the Fed's decision to raise the rate

The dollar reached 14 years peak to a basket of major currency rivals on Thursday after the US Federal Reserve has increased the number of expected rate increases in 2017, reviving lasted for a month rally and hitting the currencies of emerging markets.
The US Federal Reserve raised its key interest rate by a quarter point and indicated to accelerate the increase in the cost of borrowed funds in 2017 after promises of President-elect Donald Trump to spur economic growth with tax cuts, increased spending and deregulation.
The range of federal funds rate has been raised to 0,50-0,75 percent as expected by financial markets, however, the signals that the Fed could raise rates three times in 2017, instead of two, as expected in September, seems to have caught them by surprise.
By 5.53 GMT the dollar index to continued rally and rose by 0.57 percent to 102.32. It touched the mark of 102.620, the highest since January 2003. Euro fell by 0.3 percent to $ 1.0503 after falling to a minimum of 21 months to $ 1.0468.
Dollar on Thursday struck a 10-month high against the Japanese yen, reaching 117.860 yen, rising by 0.3 percent to 117.50.

UOB forecast range for USD/JPY

According to currency strategists at UOB Group the forecast for USD/JPY remains bullish and suggests a period of consolidation before further growth. They say that the fluctuations of the US dollar yesterday made a mixed outlook. Further, it is expected fluctuations to be in the range of 112.84/114.77.
The bank already have closed their long positions in the pair and have a neutral opinion about it today, they do not expect any change in the opinion of analysts. The pair is currently moving around in its early stage of the consolidation phase, as it will probably go to a very wide range of 111.50/115.00, analysts say.

Three-week rally in the dollar against the yen is the biggest since 1995

Today is Friday - the last trading day of the week. If the dollar against the yen at the moment ended the day near current levels, this would be the most significant three-week rise since 1995 of the US dollar against Japanese rival, analysts say.
The opening of the markets after the celebration of Thanksgiving in the US was marked by continued growth in yields of US Treasury bonds. This pushed the USD/JPY up in Asian session, they added.
Markets calculated in the price the likelyhood of raising interest rates by the Federal Reserve in December long ago. But the flow of strong economic data continues to affect positive mood. Currently 64% of market participants expect another increase in US interest rates until June 2017, except for December, analysts reported. Earlier this week, the probability was 58 percent and half month ago - twice as low.
Technically USD/JPY now appears extremely overbought. 14-day indicator RSI (relative strength index) for 10 consecutive sessions held in the area more than 70%. Moreover, there are no signs of a possible reversal or correction, analysts conclude.

Nikkei is up for the 6th consecutive session due to the strengthening of the dollar against the yen

Japan's Nikkei index rose for the sixth consecutive session on Thursday because of hopes for growth of earnings of Japanese exporters against the background of rise of the dollar against the yen.
The dollar rose after upbeat economic data in the US, which further strengthened the likelihood of the Fed raising rates.
Nikkei closed the trading session rising by 0.9 percent to 18.333.41 points.
The broader Topix index also gained 0.9 percent, ending trading session at 1.459,96 points and showing an increase for 10th consecutive session.
Index JPX-Nikkei 400 gained 0.9 percent to 13.105,50 points.
USD/JPY is currently trading at 113.32 yens per dollar.

Dollar once again attacking highs

On world markets the dollar once again attacking highs: against the euro the US currency reached a mark of 1.054, while the dollar index rose to new multi-year highs.
Published data on reserves and production of oil in the United States did not changed the situation significantly: oil quotes reaction was mixed, but in general the price of oil in the first minutes remained in a narrow range of $49,20-49,40 per barrel after statistics. It did not lead to significant fluctuations in the domestic market.
Keeping in mind the outcome of the upcoming meeting of representatives of OPEC in late November, investors continue very painfully to react to any hints in favor of tightening of US interest policy.
USD/JPY easily overcomed 111.00 level and is now heading to new highs.