The yen is mixed but any weakness should be short lived

Moribund conditions persist

Right now it’s really difficult to saying anything dramatic about the state of the forex market. If I had to try to think of a few words that may describe it satisfactorily, then I’d probably choose words such as lethargic, moribund, languid, listless, languorous and possibly undynamic.

I think you get the idea. Boring.

One week the market is encouraged by the signs of recovery. The next it decides it should wait before committing to a particular direction. For the past two months it has basically moved sideways. It can be described as a trend but it’s not an exciting one.

In some ways it’s not surprising. For every economic release that hints at the promise of better things to come we get other numbers that cast doubt. This past week has really shown that while there is an acknowledgment of a general reduction in the pace economic deterioration there is not really any sign of any sense of confidence by either businesses or consumer. In Japan sales are sluggish, industry is seeing only modest improvement but nothing close enough to cause a spate of hiring.

In Europe 33 percent of workers fear losing their job. In Spain alone the unemployment rate is 17.9 percent... In the States, jobless data has become flat and home sales rising but regional Federal Reserve Boards report flat output.

However, in spite of all that equity markets continue to rise on the anticipation of better things to come.

All this hardly portends a flurry of activity in the forex market.

I do feel the dollar is coming to a low against the European currencies and the Yen has seen its low, or is very close to seeing a low against the Dollar. But in general the coming week will merely see the recent lethargic, moribund, languid, listless, languorous range trading continue.

However, the prospect is that at some point we’ll see the Yen’s weakness against the European currencies come to an end. It should be this week and that will probably the biggest excitement we’ll be able to extract from the market.

Ian Copsey


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