USD/JPY: Yen to win the battle of the safe havens – Rabobank

FXStreet Team FXStreet

The Japanese yen and the US dollar are both safe-havens assets. Economists at Rabobank see a battle between these two currencies with the JPY outpacing the gains in the USD amid a fall in risk appetite. They expect the USD/JPY trading around the 105 zone in the coming months.

Key quotes

“From fears about the impact of a second wave of covid-19, to worries about the disappointing pace of fiscal stimulus in the US there are plenty of economic factors to concern investors. Added to this are fears about possible disruption from the US election in addition to various geo-political factors.”

“On any sharp fall in risk appetite in the coming months, we expect that the JPY is the only other currency which could keep up or outpace the gains in the USD. Which currency is the better performer may be a function of the type of news that is undermining investor confidence.”

“The JPY can be very sensitive to geopolitical risk, particularly in the Asian region. There are currently plenty of headlines related to China and the reactions of other regional countries to its activities in the S. China Sea, E. China Sea and Taiwan Straits. Activity along China’s land border with India and have also been a concern. Our central view is that USD/JPY will be holding around the 105 area in the months ahead, though any further rise in tensions on this front could push USD/JPY lower.”

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD stays defensive below 0.7150 after Chinese data

AUD/USD remains on the back foot below 0.7150 in the Asian session on Tuesday, close to an over three-week low touched the previous day. US bond yields hold near multi-year highs ahead of the FOMC meeting and oil-driven inflation risks, supporting the US Dollar and weighing on the currency pair. Mixed Chinese activity data for August also fail to inspire the Aussie.

USD/JPY extends gains toward 155.00 amid USD resurgence

USD/JPY keeps pushing higher toward 155.00 early Tuesday, looking for more upside, as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and could limit USD/JPY's upside. .

Gold set to fall toward $4,000 as Warsh faces a Fed rate-hike dilemma

As the Federal Reserve monetary policy announcement approaches and the Middle East war intensifies, the US Dollar resumes its advance. Gold price posted a tepid attempt to recover its shine in early August, but with renewed USD demand, the bright metal faltered miserably and is now closer to the $4,000 mark than the encouraging $4,700 peak from a month ago.

Ripple, Cardano, Hyperliquid – Easing bullish momentum sparks downside risks

Top altcoins, including Ripple (XRP), Cardano (ADA), and Hyperliquid (HYPE), are trading in the red on Tuesday, with roughly 2% losses so far. The altcoins are facing downside pressure ahead of the CLARITY Act cloture vote scheduled for Tuesday.

Markets slide as FOMC approaches

The US Dollar remains strong as markets turn increasingly cautious ahead of the FOMC. Stocks are tumbling, while Gold and Silver are moving lower under pressure from the stronger Dollar. The Japanese Yen is weaker again, while Crypto is correcting. BTC is approaching a key technical test and could fall below its 50-week moving average, while ETH remains above $2,405.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.