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Yen gains against the commodity-linked currencies

Yen gains against the commodity-linked currenciesJapan’s yen, the chief beneficiary on currency market, had collected its gains as the commodities-linked major currencies like the Australian and New Zealand dollars are shaken by the downbeat session of oil prices at the end of the week, February 19.

The yen, who had experienced the worst start of the year for stocks since 2009, was able to hit a 2 ½ year high against the euro in Asian time before the close of its consolidation. The U.S. dollar was also down against yen for 0.3 percent making the yen stronger at 112.91. Australian and New Zealand dollars, as said earlier, are also experiencing the same fate as the U.S. dollar with a loss of 0.6 percent at $0.7114 and 0.5% at $0.6615 respectively.

Sterling, at the same time, is trading lower as some of the European Union (EU) leaders are digging in concerns on the government’s needs to fight against a “Brexit” vote to leave the bloc. The said currency will be facing the biggest issue this weekend as it unfolds its reaction to a series of potential triggering factors on Prime Minister David Cameron’s efforts on finding a strong new deal on Europe keeping other major players in his Conservative party on side.

The issue on Sterling is predicted to cause a risk of major sell-off in the said currency and could drag the euro with it against the U.S. dollar according to Richard Benson, head of portfolio management at currency fund Millennium in London. In Reuter’s news today, “Signs overnight were that EU leaders were digging in their heels on some of Cameron’s demands and sterling traded down at 0.1 percent at $1.4322 in early trade in Europe. It was down 0.2 percent against the euro at 77.61 pence.” With all the data shown in charts, many currency traders are verbalizing their sentiments on dumping Sterling if something goes wrong.

On the other hand, Euro gained at $1.1127 after shedding a two-week low of $1.1071 overnight. Despite of its gain, many traders believe that a break below those levels in the European trade could arise the probability of brining the currency back towards $1.0950. The minutes of the January meeting of the European Central Bank on Thursday is looking at more weakness in the euro against the dollar ahead of a March meeting. This time, a further policy easing is expected to be delivered.

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