Forex: USD/JPY stays above 100 – just

on Jul 15, 2013
Listen Monday July 15th:_ Well into today’s New York session the US dollar had climbed against the yen to an intraday high at 100.47, comfortably ahead of the psychological barrier, but following the negative US retail sales update the pair has retraced to 100.08.

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US retails sales were reported a short time ago as up by 0.4 percent in June, versus the revised 0.5 percent rise in May and only half of the expectations for a 0.8 percent rise.
Excluding auto sales, the number was flat in June m/m after rising 0.3 percent the prior month. A further measure of retail sales, which also excludes gasoline and building materials and which corresponds most closely with the consumer spending component of GDP, rose 0.1 percent in June after rising 0.2 percent in May.

Last month, receipts at auto dealerships increased 1.8 percent after advancing 1.4 percent in May, whereas sales at building materials and garden equipment suppliers fell 2.2 percent, the weakest reading since May last year.
On a more positive note, the NY Fed’s Empire State Manufacturing Survey also came out earlier, showing a rise to 9.46 in July, beating expectations for a fall to 5.0 and well up on June’s 7.84.

The yen posted sharp gains against the US dollar last week after release of the minutes of the US Fed’s June policy meeting. The minutes indicated that the Federal Open Markets Committee remains deeply divided over when to scale down the current round of QE, whereby the Fed stands in the market for up to $85 billion in T-bills each month. Half of the FOMC’s members appear to favor scaling down QE before the end of 2013, while others see the labour market as still too fragile for ‘tapering’ to get under way.
Subsequent remarks by various Fed functionaries, including soon-to-depart Chairman Bernanke, only added to the market’s bemusement.


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