Japanese Yen fell strongly in 2 years

Japanese Yen fell strongly in 2 years

Japanese yen yesterday had the strongest decline in 2 years against the dollar after Japanese Prime Minister Shinzo Abe announced that they will strengthen the economic stimulus measures after the landslide victory of the ruling coalition in Japan's upper house election held on the weekend. The rate increase of the majority coalition in the Japan upper house will allow policy makers to pass bigger fiscal stimulus package in a easier way.

According to analysts, fiscal stimulus could reach 10 trillion yen, Central Bank of Japan (BOJ) is also expected to strengthen easing monetary policy by expanding programs to purchase bond in order to maintain a weaker Yen to boost growth after the currency rose sharply in recent times.

British pound rose in early trading week after Andrea Leadsom -  Theresa May's only rival in the race to the leadership position of the Conservative Party and as prime minister suddenly announced to give up. In a yesterday speech, Prime Minister David Cameron said he would resign on 12th of July. According to procedure, the queen will invite Ms. May, the leader of the party dominating in the House of England, to form a new government.

UK finds a new prime minister, this has temporarily closed a period of 3 weeks with a series of turbulent shocking developments. Majority of Britons supported the decision to leave EU in a referendum held on 23rd of June, it has made the global financial markets tanked sharply. The market volatility has peaked when the exchange rate of the pound against the dollar fell to the 31-year record lows.

The majority of analysts are predicting that the BoE will cut interest rate from 0.5% to 0.25% in this session, but there are people who still believe that this will only happen in August. The recent political arena in England is highly volatile, policy makers at the Bank of England may step into the period of remaining policy until the claims concerning Brexit from government are formally launched. If the BoE cut interest rates, the pound will continue falling and set new lows. In this case of no action from this agency, GBP/USD will see a bounce back from the 31-year low.

 

CURRENCY

BUY

SELL

TARGET

STOP LOSS

Gold

 

1358

1342

1366

EUR/USD

 

1.1090

1.1010

1.1130

GBP/USD

 

1.3090

1.2920

1.3180

AUD/USD

 

0.7600

0.7510

0.7650

USD/JPY

102.80 

 

103.80

102.30

 

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