JPY
This past week the Yen strengthened considerably against the Dollar, the Pound and the EUR. Driving the Yen’s bullishness were lower U.S. equity markets, reports of a potential reduction in the sovereign credit rating of Britain, and stronger economic indicators coming from the Euro-Zone economy. The Yen gained almost 2% on the Dollar to finish the week at 97.15 from 99.09. The Japanese currency appreciated 2.8% from a week ago against the Pound. The EUR gained on the Yen to close up at 128.67 from 129.33.
Traders will be anticipating a Bank of Japan (BoJ) press conference on Wednesday when the BoJ Outlook will be explained, highlighting their pessimistic or optimistic views of the Japanese economy. Improving economic conditions outside of the Japanese economy may begin to weaken the Yen as looser credit begins to appear. The Yen could be depreciated against the Dollar to level of 99.00 Yen and against the Pound of 144.00.
AUD
Fears of a recession and higher unemployment have been weighing on the Aussie Dollar. Also comments by the International Monetary Fund (IMF) hurt the Dollar as it said there is further room for the Bank of Australia to cut interest rates. This caused the Dollar to fall against almost all the major currencies this past week. Further worries of an economic recession may continue to send the Aussie Dollar lower against its rivals. The AUD/USD could trade near the 0.7100 mark.
NZD
The New Zealand Dollar (NZD) also fell this past week versus the Dollar and the Yen. Similar concerns remain regarding the continuing deterioration of economic conditions in New Zealand. This week, traders will be looking for the Reserve Bank of New Zealand (RBNZ) to cut rates by 50 basis points. This rate change has largely been priced into the currency. The real point of interest will be the accompanying Rate Statement in determining the extent of cuts the RBNZ is willing to undertake to support the struggling economy. Further hawkish language could send the pair to the 0.5600 level.
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