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24 Feb 2015
Dovish Yellen to strengthen Yen – FXStreet
FXStreet (Barcelona) - A dovish tone by Yellen in today’s testimony might trigger a correction in US stocks and a sharp fall in Treasury yields, which could strengthen the Yen, notes FXStreet Editor and Analyst, Omkar Godbole.
Key Quotes
“It is widely believed that Fed chair Janet Yellen is likely to testify in line with the tone of the latest Fed minutes, which showed policymakers are in no hurry to raise the interest rates. Still, the USD/JPY pair advanced to 119.50 levels today.”
“Much of the move appears driven by technical factors as the 10-year Treasury yields in the US hovers at 2.08%; which is well below their latest cyclical high of 2.164%.”
“Thus, dovish comments from Fed chair later today could result in sharp fall in the Treasury yields, resulting in strength in the Japanese Yen.”
“Furthermore, a dovish tilt could be read as negative news by the equity markets in the US which trade near record high levels. Equities in the US have been treating rate hike as positive news.”
“However, any sign of delay in the interest rate hike today could trigger a correction in the US stocks, leading to strength in the Yen.”
Key Quotes
“It is widely believed that Fed chair Janet Yellen is likely to testify in line with the tone of the latest Fed minutes, which showed policymakers are in no hurry to raise the interest rates. Still, the USD/JPY pair advanced to 119.50 levels today.”
“Much of the move appears driven by technical factors as the 10-year Treasury yields in the US hovers at 2.08%; which is well below their latest cyclical high of 2.164%.”
“Thus, dovish comments from Fed chair later today could result in sharp fall in the Treasury yields, resulting in strength in the Japanese Yen.”
“Furthermore, a dovish tilt could be read as negative news by the equity markets in the US which trade near record high levels. Equities in the US have been treating rate hike as positive news.”
“However, any sign of delay in the interest rate hike today could trigger a correction in the US stocks, leading to strength in the Yen.”