Forex Pros – The dollar slumped to an eight-day low against the yen on Tuesday, as concerns over escalating violence in Libya and the Middle East boosted demand for the safe haven yen.
USD/JPY hit 82.78 during European morning trade, the pair’s lowest since February 10; the pair subsequently consolidated at 82.94, dipping 0.23%.
The pair was likely to find support at 82.32, the low of February 10 and resistance at 83.52, the high of February 18.
Violent protests intensified in Libya overnight in the most serious challenge to the 42-year rule of leader Muammar Qaddafi after government warplanes fired at protestors, according to Al-Jazeera.
In addition to Libya, anti-government demonstrations continued in several other nations in the Middle East and North Africa, including Bahrain, Yemen, Iran and Morocco.
Meanwhile, markets took in stride news that ratings agency Moody’s Investors Service had cut its outlook on Japan’s Aa2 sovereign rating to negative from stable, on concern that political gridlock would constrain efforts to tackle the nation’s debt burden.
Economic and fiscal policies “may not prove strong enough to achieve the government’s deficit reduction target and contain the inexorable rise in debt,†Moody’s said in a statement earlier Tuesday.
The yen was also higher against the euro, with EUR/JPY tumbling 1.08% to hit a six-day low of 112.48.
Later in the day, the U.S. was to publish data on consumer confidence compiled by the Conference Board as well as industry data on house prices and a report on manufacturing activity in Richmond.
ForexPros.com
