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27 Sep 2013
Flash: Sterling and the yen are the strongest currencies against the dollar – BBH
FXstreet.com (London) - Research teams noted the performances of the Yen and Sterling this week, on UK optimism and narrowing of the 10 yr money between US and Japan.
Key Quotes:
“Sterling and the yen are the strongest currencies against the dollar this week. Optimism about the UK economy and diminishing expectations of another round of gilt purchases, driven home by BOE Governor Carney's recent remarks, appear to have helped underpin sterling. Today's service index for July was disappointing (0.2% vs. consensus expectations for a 0.5% increase)”.
“Of note, in recent weeks, sterling has ostensibly been helped by the rise in yields. However, gilts have rallied strongly this week as the 10-year yield dropped 19 bp. This was seen as favorable for sterling amidst talk of good foreign interest buying”.
“The yen has gained about 0.8% against the dollar this week. Today (thus far) is the sixth consecutive session in which the US premium (on 10-year money) over Japan has narrowed. The recent peak was set on September 10 near 222 bp. Today it is below 195 bp”.
“The dollar has been confined to about a one yen range this week. Key support is seen from the trend line drawn off the mid-June lows and early August lows. It is found near JPY98.50. On the top side, the dollar has not been above JPY100 for more than two weeks”.
Key Quotes:
“Sterling and the yen are the strongest currencies against the dollar this week. Optimism about the UK economy and diminishing expectations of another round of gilt purchases, driven home by BOE Governor Carney's recent remarks, appear to have helped underpin sterling. Today's service index for July was disappointing (0.2% vs. consensus expectations for a 0.5% increase)”.
“Of note, in recent weeks, sterling has ostensibly been helped by the rise in yields. However, gilts have rallied strongly this week as the 10-year yield dropped 19 bp. This was seen as favorable for sterling amidst talk of good foreign interest buying”.
“The yen has gained about 0.8% against the dollar this week. Today (thus far) is the sixth consecutive session in which the US premium (on 10-year money) over Japan has narrowed. The recent peak was set on September 10 near 222 bp. Today it is below 195 bp”.
“The dollar has been confined to about a one yen range this week. Key support is seen from the trend line drawn off the mid-June lows and early August lows. It is found near JPY98.50. On the top side, the dollar has not been above JPY100 for more than two weeks”.