Daily Forex Overview

Previous session overview

On Thursday, the U.S. dollar sold off along with stocks and bonds as traders fled for safer waters.

The dollar fell to a two-month low against the yen in Asia Friday after Japan's finance minister said the government has no plans to intervene to boost the U.S. currency, prompting non-Japanese players to sell it.

The U.S. currency also touched a four-and-a-half-month low versus the euro, weighed by speculation for potential cuts in the U.S. credit ratings, dealers said.

Non-Japanese investors pushed the greenback to JPY93.86, the lowest since JPY93.55 on March 19, after Yosano told a news conference that Tokyo is not "at all thinking about intervening in the foreign exchange markets at this point," dealers said.

The Pound had a very volatile day crashing after the S&P put the UK on negative watch. The pair found support at USD1.55 and rebounded for the rest of the day to touch fresh week highs just below USD1.5900. UK business investment fell 5.5% in Q1. GBPUSD traded with a low of USD1.5513 and a high of USD1.5893 before closing the day at USD1.5870 in the New York session.

The Australian dollar was stronger late Friday as concerns about the U.K.'s AAA sovereign credit rating cast similar questions about U.S. creditworthiness, weighing on the greenback.

Market expectation

The euro is higher against the yen, pound and dollar on Friday, reflecting an emerging shift in sentiment toward the U.S. currency.

Analysts said the near-term risks to the U.S. dollar might remain to the downside.

Traders said the greenback could fall below JPY93.55 in the near term. A break below there could open the way for JPY90.00, they said. The euro could rise to as far as USD1.4300.

Yet, the euro may remain directionless versus the yen within a range of JPY127.00 to JPY133.00 in the short term partly because Japan's economy looks just as weak as Europe's, dealers said.

Talk in Asia suggested decent offers from a US account were positioned at USD1.3960, and threatening to counter any further push higher, which in turn prompted spec longs to pare back. Rate eased through the balance of the overnight session to USD1.3900, recovering into early Europe to USD1.3925. Rate currently trades around USD1.3923. Offers seen placed toward USD1.3945, with stronger interest remaining in place toward USD1.3960. Early mentions of a USD1.4000, though market not fixated o0n this level as yet as appears several have decent offers ahead. Support USD1.3900/890, USD1.3870.

Most important events of the day