CIBC waits for the dollar to fall by the end of the week

Against the backdrop of growing uncertainty surrounding the prospect of changes in US tax legislation, uncertainty in the bargaining of the two parties, the dollar faces the possibility of a retreat as it approaches the weekend, says Koh Haruki, head of the financial solutions group at CIBC World Markets (Japan) Inc. in Tokyo. Tax reform affects the flow of capital in the United States. Delay with this issue will lead to the sale of the dollar, the expert believes. Changing the orientation of the market for tax reform negotiations – which take time to progress – means that the dollar becomes vulnerable to decline.
While USD / JPY forms the top of about 114, Japanese insurance companies’ plans to buy foreign bonds attract attention and can support the pair. USD / JPY may not hit July high at 114.49 in the short term, it is likely that the pair will remain around 113.50-113.60 and 113.20-113.30. The pair today is slightly changing, trading at 113.89.

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