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Categorized | Currency News

Euro Holding Firm But Yen Weakens On Further Intervention Talk

In early trading on Tuesday euro held firm against the US dollar amid renewed discussions on Greece, the US dollar however rallied against a weaker yen as the sound bites from Tokyo suggesting that the Bank of Japan is prepared to intervene in the currency market.

The dollar gained ground yesterday against the yen rising to 108.75.

The Euro US dollar is holding firm around the 1.138 level, as new talks are set in motion on the future of Greece that could put pressure on the single currency.

On Monday night there was an announcement that an agreement between Athens and creditors could be finalised during the coming days. However traders were not so sure.

As far as the US dollar and Japanese yen goes, statements from the Japanese authorities have made it look almost certain that they are ready to intervene in the markets to stop the slide in the yen. This rhetoric has caught the attention of the markets and traders are ready to take advantage of the situation as it begins to unfold.

In the United Kingdom this week all eyes will be focused on the official bank rate and the monetary policy summary released on Thursday midday. Although the general consensus is that the Bank of England will not increase rates, the attitude towards the economy in the notes will be closely scrutinised by traders.

The United States Federal reserve have held interest rates on hold since the hike at the back end of 2015, and although many thought the United Kingdom would follow suit as yet the Bank of England has refrained from doing so. This has been partly due to a renewed weakness in the economy and unstable markets. No doubt the Bank of England would like to see the effect of the Brexit vote before it changes any monetary policies.

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