USD/JPY Hits 2 Month High

The dollar traded at its highest level against the yen in more than 2½ months Monday ahead of speeches by Federal Reserve policy makers and a report on October retail-sales growth later in the week.

The buck traded at ¥123.61 , its highest level since Aug. 20, according to FactSet data. The dollar traded at ¥123.15 late Friday in New York, when it recorded its largest weekly gain against the yen since May.

The euro  traded at $1.0745, compared with $1.0737 Friday. The shared currency fell to $1.0706, its lowest level in more than six months, on Friday after the U.S. Labor Department said the economy added 271,000 jobs in October, beating expectations by a wide margin.

Friday’s data cemented the belief that the Fed will raise interest rates at its December policy meeting, setting the dollar up for further gains.

“The dollar is being borne aloft by rising U.S. yields, and should do well against commodity and EM currencies as we head towards the December FOMC,” said Alvin Tan, a currency strategist at Societe Generale, in a note to clients Monday.

On Thursday, three top Fed policy makers — Chairwoman Janet Yellen, Vice Chairman Stanley Fischer and New York Fed President William Dudley — will speak publicly, which they may use as an opportunity to provide more details about the upcoming rate hike. The Fed hasn’t raise interest rates since 2006.

via MarketWatch

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza