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The yen seems to be opting for continued climb even after the U.S. presidential election this November 8, which has affected markets worldwide and goaded currency towards its best performance since financial crisis globally in 2008.
Options traders are expecting more gains from yen as the election draws near. Meanwhile, since early January, the hedge funds have been at stake exhibiting that the Japan currency will yield more.
JPMorgan Chase & Co. and HSBC Holdings Plc stated that neither of the forerunners in the election will provide a stronger dollar. In other words, any yen changes for a short time as the election draws near will likely give way to its longer term improvement. Pricing in Federal rate hike is also anticipated.
On Monday, Japan’s currency dropped to 104.49 per dollar, which is a slide of 1.3 percent. This change overshadows its last week gains following Federal Bureau of Investigation announced that its statement is unchanged concerning Hillary Clinton e-mail probe. According to FBI, the presidential candidate did not commit any crime in handling of e-mails.
In the meantime, this is a reminder for investors about the market’s unpredictably irresolute behavior in the midst of the final election campaign. Mexican peso has increased, whereas Swiss franc and euro plunged.
Bloomberg News survey shows that there will be higher gains for Japan’s currency should Donald Trump wins. Alternatively, there will be decline possibilities in favor of Clinton.
Last week, the dollar dropped the highest against Japan’s currency since July. This occurrence took place in spite of futures prediction that Fed interest hike will happen in December with 82 percent odds.
After its December recovery, yen dropped in November 2015 when the borrowing costs were increased by the U.S. central bank for the first time in 10 years. Among 16 major currencies, the Japanese currency had the stronger performance with 15 percent increase.