USD/JPY should head down to the 145.00 area and probably close to 140.00 later this year – ING

FXStreet Insights Team FXStreet

USD/JPY rallied on what in the end was a widely expected BoJ rate hike. Economists at ING analyze the pair’s outlook.

More of a Dollar story

The broad-based view is that the gulf in interest rates between Japan and many other central banks in the G10 space means that the Yen will still be used as a funding currency in a low-volatility world.

Our baseline view now sees USD/JPY perhaps trading around the 150.00-152.00 area as long as short-term US rates stay firm. When they turn lower over the coming months, USD/JPY should head down to the 145.00 area and probably close to 140.00 later this year when the Fed easing cycle is in full swing (we look for 125 bps of Fed cuts this year).

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD holds rebound near 0.6900 on US-China trade optimism

AUD/USD holds the rebound near 0.6900 in the Asian session on Monday. Mixed China's inflation data for October fails to provide any inspiration to the Chinese proxy, the Australian Dollar, but China's extension of the suspension of 24% tariffs on US goods and reduced US-Iran tensions help the Aussie pair cling to recovery gains.

USD/JPY retreat in sync with USD, appraches 158.00

USD/JPY is back in the red at the start of the week on Monday, eyeing the broad US Dollar retreat amid easing US-Iran tensions. Traders also resorting to profit-taking following the blockbuster US Nonfarm Payrolls data-led rally. US CPI report is next in focus.

Gold: $4,100 reclaimed. Will buyers succeed ahead of US inflation test?

Gold is back above the $4,100 mark, kicking off a big week on Monday with a strong rebound. However, it remains to be seen whether the bright metal sustains another attempt above that level ahead of critical US Consumer Price Index data due on Tuesday.

Top 3 Price Predictions: Bears in control, with next support at BTC $70,000, ETH around $2,000 and XRP near $1

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) bears remain in control, with the top three cryptocurrencies correcting over 4%, 6% and 10%, respectively, last week and marking their fifth consecutive weeks of losses. BTC trades around $75,530 on Monday after closing below key Exponential Moving Averages (EMAs), leaving the $70,000 level as its next major support.

Economics week ahead

Next week, attention turns to Tuesday’s CPI report, with no year-over-year readings available because of last October’s shutdown-related data gap. We expect headline and core inflation to clock 0.28% and 0.21% month-over-month, respectively. Softer core inflation would offer some relief after September’s upside surprise but should still leave our call for a December rate hike intact.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.