Forex Pros – The U.S. dollar fell to a one-week low against the yen on Friday, as ongoing fears over Greece’s sovereign debt crisis supported demand for the safe haven currency.
USD/JPY hit 81.05 on Wednesday, the pair’s highest since June 2; the pair subsequently consolidated at 80.02 by close of trade on Friday, slipping 0.28% on the week.
The pair is likely to find support at 0.79.69, the low of June 8 and a five-week low and resistance at 81.05, Wednesday’s high.
Hopes for a solution on an aid package for Greece were raised on Friday after German Chancellor Angela Merkel dropped demands that bondholders should share the burden of a new bailout package for Greece.
But risk aversion remained elevated after ratings agency Moody’s said it was putting Italy’s sovereign rating under review, pending a possible downgrade.
On Wednesday, the dollar advanced to an almost two-week high against the yen after U.S. data showed that core inflation posted its largest monthly gain in nearly three years in May.
The Labor Department said consumer prices rose by a seasonally adjusted 0.2% last month, after a 0.4% increase the previous month. Core inflation, which excludes volatile energy and food costs, rose by 0.3% in May, the biggest jump since July 2008.
Economists had forecast a 0.1% rise in overall prices, and a 0.2% gain for core inflation.
In the week ahead, the Federal Reserve is to hold its policy setting meeting, which will be followed by a closely watched press conference by Fed Chairman Ben Bernanke.
Investors are hoping that Bernanke will shed some light on the banks view of the need for further monetary easing. Meanwhile, Japan is to publish official data on its trade balance.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, June 20
Japan is to publish official data on its trade balance, the difference in value between imported and exported goods and services.
Tuesday, June 21
The U.S. is to release a report on existing home sales, a leading indicator of economic health. Meanwhile, Japan is to publish an index of all industries activity.
Wednesday, June 22
The Federal Reserve is to announce its federal funds rate. The announcement will be followed with a press conference by Fed Chairman Ben Bernanke to discuss the bank’s rate statement.
Thursday, June 23
The U.S. is to publish government data on initial jobless claims, as well as official data on new home sales, both leading indicators of economic health.
Friday, June 24
The U.S. is to round up the week with official data on durable goods orders, a leading indicator of production, as well revised data on first quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy’s health.
ForexPros.com
