Wednesday, September 8, 2010

FOREXYARD: Forex News Blog

FOREXYARD: Forex News Blog

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Will the Bank of Japan Intervene in the Currency Market?

Posted: 06 Sep 2010 06:56 PM PDT

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The US dollar's resurgence in today's early morning hours has led to a number of significant support levels on USD crosses being tested. The EUR/USD pair has dipped towards the 1.2790 support line, while the GBP/USD hit 1.5350 and seems to be holding steady at that mark. With today's news focusing primarily on Australia and Japan, we should see thin trading conditions continue while USD crosses shift in response to this morning's movements.

Today's leading events:

04:30 GMT: AUD – Cash Rate

Taking place during the early morning hours before most of Europe awakens means that this announcement will likely see a latent result on the value of the AUD throughout the day's trading and investors shouldn't rule out the fluctuations in the Aussie follow this figure's release.

The Cash Rate is the Reserve Bank of Australia's (RBA) official short-term interest rate and therefore is one of the most important figures released regarding the direct value of a currency. The importance of interest rates in currency valuation makes today's announcement vital to the future movement of the AUD over the next few weeks.

Tentative: BOJ – Press Conference

The Bank of Japan's (BOJ) post-interest rate press conference is one of the most significant events for the Japanese yen. With all of the speculation surrounding possible bank intervention against the continuously rising JPY, this announcement will likely shed further light on the situation of the yen and give traders a better idea on how likely, or how close, Japan's central bank is on attacking what they view as the over-strengthened JPY.

Hawkish statements could lead to a strong depreciation of the yen as this will likely signal future steps at weakening the currency to help boost Japanese exports.
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