The Japanese yen and the U.S. dollar strengthened against its major counterparts in the Asian session on Wednesday amid rising risk aversion, with the negative lead from Wall Street overnight and the fall in crude oil prices denting investor sentiment. Weak trade data from China on Tuesday has stoked concerns about a global economic slowdown.
Meanwhile, the investors expect the Federal Reserve to continue the interest rate hike this year since recent data, including Friday’s jobs report, downplayed fears about recession.
In other economic news, data from the Bank of Japan showed that the M2 money stock climbed 3.1 percent on year in February, coming in at 919.3 trillion yen. That was shy of expectations for an increase of 3.2 percent, which would have been unchanged from the January reading.
Tuesday, the yen rose against its major rivals. The yen rose 0.72 percent against the euro, 1.06 percent against the pound and 0.77 percent against the franc.
Meanwhile, the U.S. dollar showed mixed trading against its major rivals yesterday. While the U.S. dollar fell against the euro and the Swiss franc, it held steady against the pound.
In the Asian trading, the yen rose to a 1-week high of 159.51 against the pound and a 6-day high of 123.44 against the euro, from yesterday’s closing quotes of 160.05 and 124.02, respectively. If the yen extends its uptrend, it is likely to find resistance around 155.00 against the pound and 122.00 against the euro.
Against the Swiss franc and the U.S. dollar, the yen advanced to 8-day highs of 112.68 and 112.41 from yesterday’s closing quotes of 113.03 and 112.62, respectively. The yen may test resistance near 112.00 against the franc and 110.00 against the greenback.
Against the Australian, the New Zealand and the Canadian dollars, the yen climbed to a 5-day high of 83.35, 6-day high of 75.74 and an 8-day high of 83.65 from yesterday’s closing quotes of 83.77, 75.92 and 83.98, respectively. On the upside, 79.00 against the aussie, 73.00 against the kiwi and 81.00 against the loonie are seen as the next resistance levels for the yen.
The U.S. dollar rose to 2-day highs of 1.0974 against the euro and 0.9979 against the Swiss franc, from yesterday’s closing quotes of 1.1009 and 0.9956, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.07 against the euro and 1.01 against the franc.
The greenback edged up to 1.4183 against the pound and 0.7412 against the Australian dollar, from yesterday’s closing quotes of 1.4212 and 0.7438, respectively. The greenback may test resistance near 1.39 against the pound and 0.72 against the aussie.
Against the New Zealand and the Canadian dollars, the greenback advanced to 5-day highs of 0.6732 and 1.3442 from yesterday’s closing quotes of 0.6741 and 1.3408, respectively. The greenback is likely to find resistance around 0.66 against the kiwi and 1.38 against the loonie.
Looking ahead, at 4:00 am ET, Bank of England’s Deputy Governor for Prudential Regulation and Chief Executive of the Prudential Regulation, Andrew Bailey, are expected to speak at the Barclays European Financials Capital Summit 2016, in London.
Subsequently, U.K. industrial production for January is due to be released at 4:30 am ET.
In the New York session, U.S. wholesale trade sales for January and U.S. crude oil inventories data are set to be published.
The Bank of Canada will announce its interest rate decision at 10.00 am ET. Economists expect the bank to retain interest rates unchanged at 0.50 percent.
The material has been provided by InstaForex Company – www.instaforex.com