In the New York market, the yen is expected to trade in a range ahead of the release of US September CPI tomorrow. Dollar/yen may continue to trade within a range, influenced by factors including developments in Europe and the Middle East and oil prices.
In today's New York foreign-exchange market, dollar/yen is unlikely to establish a major trend ahead of the release of US September CPI tomorrow. Market participants expect range-bound trading to predominate.
Dollar/yen rose temporarily to ¥158.37 before falling below ¥158 again, highlighting resistance on the upside. There is a growing view that even temporary buying by short-term traders will not lead to the formation of a longer-term trend.
Euro/dollar remains on a downward trend, but many market participants see few factors supporting euro buying, with fiscal concerns and political uncertainty in Europe weighing on the currency. Oil-price movements and uncertainty surrounding the situation in the Middle East are also affecting the dollar's relative strength.
Tomorrow's CPI will be an important data point for the outlook for US interest rates. While the possibility of a rate hike in December is in focus, evidence of slowing inflation could also lead to dollar selling. France's fiscal problems, UK policy developments and developments in the Middle East will also be market focuses.
• Expected range upper bound: The upside target for dollar/yen is the high of ¥158.75 on the 12th. • Expected range lower bound: The downside target for dollar/yen is the low of ¥157.52 on the 8th. Below that is ¥156.64, the lower bound of the daily Ichimoku cloud.