Dollar’s best weekly performance against yen since early June

The US dollar looks to be on target for its best weekly performance against the Japanese yen since early June, despite yesterday’s slip on the back of concerns for the stability of the US economy with the potential tapering of the Federal Reserve’s $85 billion a month bond purchasing program once again coming to the forefront of investors minds.

The greenback slid against all of its major peers yesterday’s, falling to an eight week low against the pound sterling and sliding to 97.08 against the Japanese yen, amongst others. Despite yesterday’s declines and the current area of uncertainty, the US dollar has remain competitive amongst the world’s most commonly traded currencies today. The USD is currently up 0.0006 against the euro, trading at 1.3339, after peaking at 1.3351 earlier in the day, however it has slid against a particularly strong yen. The USD/JPY parent is currently trading at 97.42, down 0.30 after hitting 97.71 earlier in the day.

The Fed’s Stimulus

Ever since May 22nd, when the Federal Reserve chairman made some comments regarding a potential slowdown of their stimulus, investors have been second-guessing data and have been trading extremely cautiously. This saw the first half rally in the stock markets come to a grinding halt and led to a huge shift in the value of currencies across the globe.

In a survey of analysts that was recently conducted by Bloomberg, the majority of analysts believe that the US central bank would begin tapering their bond purchasing program in September. It is widely believed that the initial reduction in stimulus will be to the tune of $10 billion, which won’t be enough to seriously disrupt trading itself but will plant the seed of doubt in the minds of investors.

New Zealand Earthquake

An earthquake that registered 6.9 on the Richter scale has hit Wellington, the capital of New Zealand. This  wiped out earlier gains by the kiwi, although as further reports come in that suggests there is little damage, the value of the New Zealand dollar is beginning to rise once again. It has been reported by media outlets in both Australia and New Zealand that there has been no deaths or serious injuries and that damage caused by the earthquake is “minimal”. As of 6:07 AM in New York, the kiwi had rebounded from a low of 0.80592 against the USD to 0.8086, up by 0.0020 for the day.

Sterling Looks Dominant

The pound sterling has continued to advance on the back of better than expected retail sales data for the month of July, which was released earlier this week. The British currency is currently up by 0.0015, against the US dollar trading at 1.5644 – its highest point of the day so far. The pound looks likely to continue to advance as it remains extremely bullish. Likewise, the euro has also fallen against the sterling, currently trading at 0.8531 after opening at 0.8522 and peaking at 0.8 540.