USD/JPY to grind higher on firm US inflation – Rabobank
|This week, the market will be digesting the messages from Chinese and US economic data to decide whether ‘peak growth’ is a concern or whether it is too early to rein in risk appetite. While USD/JPY has recovered from last week’s lows, the existence of these concerns has likely capped upside potential for now, Jane Foley Senior, FX Strategist at Rabobank, reports.
‘Peak growth’ makes frequent appearances in market commentaries
“Our 1 and 3 month USD/JPY forecasts stand at 111.00. This assumes no sharp retrenchment of risk appetite through the summer which would benefit the JPY.”
“We expect the debate regarding the potential for Fed tightening to keep the USD well supported while a dovish BoJ is likely to keep the carry trade alive for JPY based investors.”
“If US inflation is firm enough to keep alive the debate about the possibility of a Fed rate hike in late 2020, USD/JPY is likely to edge higher. That said, too much inflation or perhaps disappointing growth in China could see the JPY better supported if a broad based sell-off in risk appetite is triggered.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.