The Euro has failed to find acceptance above 166.00 earlier today and has given away gains. The Yen has trimmed losses as the market digests the results of Japan´s elections and the pair has retreated to rest support at last week’s high, at 194.90.
The Yen dropped across the board during the early Asian season on Monday, weighed by the defeat of the ruling coalition in the Japanese elections. The hung parliament coming out of the elections opens an uncertain period in the world’s fourth-largest economy, leaving support for the BoJ’s monetary tightening plans in the air.The Bank of Japan is meeting this week and, in the current context, they are widely expected to leave interest rates unchanged. This is likely to keep Yen’s recovery limited.
The Euro, however, has weaknesses of its own. German GDP is expected to have contracted for the second consecutive quarter, weighing on the region’s growth.
If these figures are confirmed and are accompanied by a weak inflation reading speculation about a large ECB cut in December will increase, bringing the Euro lower across the board. More By This Author:USD/JPY Gives Away Post-Election Gains And Returns To 152.50 EUR/GBP Jumps Closer To Mid-0.8300s, Upside Potential Seems Limited EUR/GBP Technical Analysis: Continues Sideways, Capped By 20-Day SMA
