Yen Climbs Amid Risk Aversion
19 October 2016 - 4:33PM
RTTF2
The Japanese yen drifted higher against its major counterparts
in early European deals on Wednesday amid risk aversion, as an
unexpected slowdown in China's industrial output offset optimism
over in-line GDP figures, and investors became cautious ahead of
the third and final U.S. Presidential debate and the European
Central Bank monetary policy decision due tomorrow.
Recent round of China economic data offered a somewhat mixed
update on the economy, with the economy expanding 6.7 percent in
the third quarter and retail sales rising 10.7 percent in
September, while the industrial output grew slowly to 6.0 percent
from last year.
Policy makers at the ECB gather for a 2-day meeting in Frankfurt
today, with investors awaiting to see whether the central bank will
continue to buy €80 billion a month of mainly government bonds
until at least March.
The Federal Reserve releases its Beige Book survey of regional
conditions later in the day, while Republican candidate Donald
Trump and Democratic nominee Hillary Clinton will face-off at the
University of Nevada, in Las Vegas, for the last time before the
Presidential elections in November 8.
The debate comes as opinion polls point to a growing lead to
Clinton over his rival Trump ahead of the next month's vote.
In economic news, data from the Ministry of Economy, Trade and
Industry showed that Japan's all industry activity expanded for the
third straight month in August.
The all industry activity index grew 0.2 percent on a monthly
basis in August, the same rate as registered in July and matched
economists' expectations.
The currency showed mixed performance in the Asian session.
While the yen held steady against the euro and the franc, it rose
against the greenback and the pound.
The yen advanced to a 6-day high of 103.41 against the
greenback, 8-day high of 104.48 against the Swiss franc and more
than a 2-week high of 113.63 against the euro, off its early lows
of 103.95, 105.01 and 114.16, respectively. If the yen extends
rise, it may challenge resistance around 102.00 against the
greenback, 102.00 against the franc and 112.00 against the
euro.
The yen edged up to 126.97 against the pound, 79.27 against the
aussie and 74.44 against the kiwi, from its previous lows of 127.89
and 79.83, and a 5-week low of 75.06, respectively. The next
possible resistance for the yen may be found around 122.5 against
the pound, 78.00 against the aussie and 73.00 against the kiwi.
Rebounding from an early low of 79.34 against the loonie, the
yen firmed to a 5-day high of 78.82. The yen is seen finding
resistance around the 76.00 region.
Looking ahead, U.S. housing starts and building permits, both
for September, and U.S. crude oil inventories data are slated for
release in the New York session.
At 8:45 am ET, Federal Reserve Bank of San Francisco President
John Williams is expected to speak before the "Improving Diversity
in the Financial Services Industry - An Holistic View" conference
hosted by the Global Interdependence Center, in New Jersey.
At 9:15 am ET, U.K. Finance minister Philip Hammond is sheduled
to deliver a speech in parliament, in London.
At 9:30 am ET, European Parliament's Brexit negotiator Guy
Verhofstadt is expected to speak at conference on "Future of EU
budget, reform of EU institutional set-up" in Brussels.
The Bank of Canada's interest rate decision is due at 10:00 am
ET .The economists expect the bank to hold rates at 0.50
percent
Subsequently, the Bank of Canada Governor Stephen Poloz and
Senior Deputy Governor Carolyn Wilkins will hold a press conference
following the bank's interest rate decision and release of its
monetary policy report at 11:00 am ET in Ottawa.
At 1:00 pm ET, Bank of England Chief Economist Andy Haldane is
expected to speak on "QE - The story so far" at Cass Business
School, in London.
At 1:30 pm ET, European Central Bank board member Daniele Nouy
is expected to speak at the European Financial Roundtable organised
by Deutsche Bank in Frankfurt.
At 2:00 pm ET, Federal Reserve issues the Beige Book of economic
condition in Washington.
At 4:15 pm ET, Bank of Canada Governor Stephen Poloz and Senior
Deputy Governor Carolyn Wilkins will testify before the Senate
Standing Committee on Banking, Trade, and Commerce, in Ottawa.
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