Daily FNArena News - Currencies

With a recovery in Japanese exports underway the yen should see some support, leading ANZ Bank to suggest the currency’s recent weakness against the US dollar should reverse.

Market analysts at FXCM suggest the US dollar is being supported by less dovish Fed commentary, while the Australian dollar has failed to hold technical support.

CIBC World Markets suggests the old risk-on, risk-off mantra for the US dollar no longer applies, the euro could come under additional pressure and the Aussie dollar could fall to parity against the greenback.

Market analysts at FXCM caution the US dollar could experience heavy selling if the market’s risk appetite holds.

As Macquarie raises its Aussie dollar forecast and cuts corporate earnings forecasts as a result, the question is posed as to what is really ensuring the currency’s defiance of gravity.

Market analysts at FXCM suggest the US dollar index is likely to recoup last year’s losses as the Fed softens its dovish monetary policy tone.

ANZ Banking Group suggests as more global fund managers invest in the Australian dollar the tradition for the currency of ‘up by the stairs and down by the elevator’ may be less appropriate.

In the view of CBA there are cyclical and structural factors that suggest the peak for the Japanese yen has now passed.

Market analysts at FXCM suggest while the US dollar has been trading in a tight range relative to the euro and other currencies, a breakout to the downside may be imminent.

Having earlier lowered forecasts for the Australian and New Zealand dollars given the issues in Europe, CBA has now reversed these changes.