USD/JPY: Yen should be the new “go to” safe-haven currency – HSBC

FXStreet Insights Team FXStreet

The Japanese yen rallied on the Bank of Japan (BoJ) governor’s “exit” talk. Nonetheless, global recession risk is more pertinent to JPY strength, in the view of economists at HSBC.

Risk appetite to be a near-term dominant FX driver

“On 26 May, the JPY strengthened further, with USD/JPY declining to intra-day lows, and this was buoyed by the mere mention of ‘exit’ by the BoJ Governor, Haruhiko Kuroda.”

“We expect risk appetite (rather than rates) to be the more dominant driver over the next few weeks, and given the pressures holding back risk appetite looks set to remain in play for now (such as concerns over slowing global growth and geopolitical uncertainties), it points to general weakness in ‘risk-on ’currencies.”

“With markets concerned about US growth, the JPY should be the new ‘go to’ safe-haven currency, a development likely to be welcomed by the Japanese government.”

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.

EUR/USD sticks to positive bias above 1.1800 as trade jitters undermine USD

The EUR/USD pair builds on the previous day's modest gains and attracts some buyers for the second straight day on Thursday amid a softer US Dollar. Spot prices, however, lack bullish conviction and trade around the 1.1815-1.1820 area during the Asian session, up 0.10% for the day.

GBP/USD bounces as soft CPI boosts BoE cut bets

GBP/USD rose 0.42% on Wednesday, recovering toward 1.3600 in a session shaped by softer-than-expected UK inflation data and broad US Dollar weakness. The pair had been consolidating in a tight range between about 1.3450 and 1.3520 for the past few days following the sharp pullback from the late-January high near 1.3870, and Wednesday's move pushed price action back onto the high side of key moving averages.

Gold retains positive bias amid sustained safe-haven demand, softer USD

Gold attracts some buyers for the second straight day as trade jitters and geopolitical tensions ahead of the US-Iran nuclear talks underpin demand for safe-haven assets. Apart from this, a softer US Dollar further supports the bullion, though the underlying bullish sentiment could cap gains. Bulls might also opt to wait for acceptance above the $5,200 mark before positioning for any meaningful appreciating move.

AUD/USD rises toward three-year highs on RBA rate hike bets

AUD/USD remains stronger for the third successive session, trading around 0.7120 during the Asian hours on Thursday. The pair advances toward its three-year high of 0.7147, last touched on February 12, as the Australian Dollar strengthens following hotter-than-expected inflation data from Australia, reinforcing expectations of further interest rate hikes by the Reserve Bank of Australia this year.

Nvidia delivers another monster earnings report, and forecasts big things to come

It was another monster earnings report from Nvidia for fiscal Q4. Revenues were $68.1bn, smashing estimates of $65bn. Gross profit margin was a healthy 75%, up from 73.5% in the prior quarter, and the outlook for this quarter was monstrous.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.