|

Japanese Yen underperforms as Middle East conflicts intensify

  • The Japanese Yen faces slight selling pressure against its major peers amid rising energy prices.
  • Intensifying Middle East conflicts have boosted oil prices.
  • Both the BoJ and the Fed are expected to leave interest rates unchanged in their policy meetings next week.

The Japanese Yen (JPY) trades lower against its major currency peers, but is marginally higher against the US Dollar (USD) at around 162.35 during the early European trading session on Monday.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.01%-0.12%-0.03%-0.07%-0.13%-0.16%0.00%
EUR0.00%-0.08%-0.02%-0.08%-0.13%-0.17%0.02%
GBP0.12%0.08%0.07%0.04%-0.05%-0.08%0.07%
JPY0.03%0.02%-0.07%-0.03%-0.09%-0.09%0.03%
CAD0.07%0.08%-0.04%0.03%-0.05%-0.06%0.06%
AUD0.13%0.13%0.05%0.09%0.05%-0.01%0.15%
NZD0.16%0.17%0.08%0.09%0.06%0.00%0.13%
CHF-0.01%-0.02%-0.07%-0.03%-0.06%-0.15%-0.13%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The Asian-Pacific currency is under pressure as surging oil prices due to energy supply disruption through the Strait of Hormuz, a critical checkpoint to almost 20% of global energy supply, have weakened currencies from energy import-dependent economies.

The continuous attack from the Iranian military on oil tankers attempting transit through the Hormuz has dampened confidence of shipping companies to use the passage.

Iran's Islamic Revolutionary Guard Corps (IRGC) said that two oil tankers were blown up after attempting to transit the southern route of the Hormuz, adding that the passage will not be safe for petrochemical products or 'single drop of oil and gas' transit as long as US actions in the region continue, The Guardian reported.

On the monetary policy front, the Bank of Japan (BoJ) is expected to keep interest rates unchanged at 1% in the July policy meeting, Kyoto reported, as stated by people familiar with the matter. The report also showed that the central bank will indicate that the monetary policy path will remain on the upside and will likely raise the growth forecast for the year.

Meanwhile, the US Dollar trades lower amid hopes that the Federal Reserve (Fed) will not cut interest rates in the policy meeting later this month.

Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

More from Sagar Dua
Share:

Editor's Picks

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold bulls seem hesitant below $4,500 amid modest USD bounce ahead of US NFP

Gold remains on the defensive below the $4,500 mark through the Asian session, snapping a two-day winning streak amid a modest US Dollar uptick. The commodity, however, remains close to the weekly high, which it touched the previous day, as traders keenly await the release of the closely watched US monthly employment details. The popularly known US Nonfarm Payrolls (NFP) report will provide more cues about the Fed's policy path amid receding bets of a September rate hike.

Bitcoin clears $80,000 on reduced rate hike odds – Zcash, Ethena rise

Bitcoin is trading above $80,000 on Friday, sustaining the broader cryptocurrency market's risk-on sentiment. Federal Reserve (Fed) Governor Christopher Waller signaled support for a potential pause in interest rates on Thursday, lowering the odds of a September rate hike to 50%. Zcash (ZEC) and Ethena (ENA) emerge as top performers over the last 24 hours.

NFP preview: Can jobs data ease rate hike fears?

As we move to the end of the week, the focus shifts to the macro data, and to the strength of the labour market in the US. August payrolls are released on Friday at 1330 BST, and the market is expecting a reading of 58k. The unemployment rate is expected to remain steady at 4.1% and wage growth is expected to moderate slightly to 3% last month, down from 3.2%.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.