INS: Crude Oil Goes Volatile on Global Developments!
Yen in need of intervention to correct high value
The USD/JPY trading during Wednesday’s Asian session was relatively quiet at 79.50. Both Japanese and US central banks would ideally want the rate to be around 80.75, according to experts. The euro was trading at the 99.34 – 99.50 levels against the yen, and is not expected to cross the 100.00 mark this week.
Japanese finance minister, Jun Azumi, has stated that he is watching the yen’s rise and will take appropriate action to curb it. Similar views have been echoed, albeit indirectly by the Bank of Japan governor Masaaki Shirakawa.
The yen’s status as a safe haven currency and its high value is creating problems for Japanese industry.
US dollar trades flat in Tuesday’s American session
The US dollar was mostly flat against other currencies in Tuesday’s American trading session. The USD/JPY trading closed at 79.50 and the EUR/USD at 1.2500 levels.
In Wednesday’s US trading session, the dollar may rise. This is due to two major factors – the Greek elections on June 17 and a US retail sales possible drop. Greek elections will determine if Greece stays in the euro currency, and so this uncertainty will fuel demand for the dollar as a safe haven currency. US retail sales are expected to drop by 0.2%, so again market sentiment will be low.
The dollar’s rate specifically against the euro will also be impacted by Eurozone industrial production figures due today. If the figures are below expectations, then again the dollar will strengthen against the euro.
Further slide in euro expected
In Wednesday’s Asian trading session, the euro slid against other currencies. This slide was attributed to the upcoming Eurozone economic data on Wednesday, as well as after Spain’s borrowing rates reached their highest levels.
The euro was trading at 1.2482 against the US dollar and at 99.34 against the Japanese yen in Tokyo. Analysts feel that the euro will slide further if the April industrial figure for the Eurozone comes lower than expected. They also feel that the euro’s weakening will not be over even if this figure is higher than market forecasts.
Greece’s upcoming elections will play a role in determining whether Greece keeps the euro currency or not. This will have a major impact on the euro trading rates. Experts are not predicting an outright win for any party, so the suspense will continue.
Crude oil prices swing on global developments
During Wednesday’s Asian session, Brent crude oil was steady at over $97 a barrel. This was ahead of a meeting of OPEC members. Investors will be waiting to see if OPEC changes its output policy, and whether Saudi Arabia will reduce its oil production.
Analysts expect volatility in the oil markets, and feel that Brent crude will trade around the $96 – $102 mark. This range is wide due to market tensions and upcoming events such as the Greek elections. Brent had earlier reached a peak of $128 in March, and its dramatic slide has been a cause of worry for investors and oil analysts.
The International Energy Agency is also to release its report on oil demand today. Any shortage in estimated global oil demand is likely to affect oil prices.
