Attention Shifts to Yen Following Dollar’s Retreat Due to Risk Aversion

The dollar and the Yen are retreating slightly today. Risk aversion recedes a bit. But as Asian markets struggle to find momentum for a recovery, risk aversion could return anytime before the close of the week. As for the week, the dollar remains the strongest, followed by the yen. The Australian dollar is performing the worst, followed by the New Zealand dollar.

Technically, the dollar is losing some intraday growth dynamics. Even gold appears to be poised for some consolidation. But the question is whether Yen can retreat in tandem. Alternatively, the torch will be transferred to the Yen so that it appreciates against other major currencies. The slight support at 104.85 in USD/JPY will be a level to watch. A break in this position could also be accompanied by renewed declines in other yen crosses such as EUR/JPY and GBP/JPY.

Few will respond to weaker-than-expected growth in durable goods orders. The euro is currently the weakest so far, followed by the Australian and Swiss francs. In general, the sentiment of market participants has deteriorated, but at the moment there is no additional selling.

US Durable Goods Orders Rose 0.4%, Ex-Transport Orders Rose 0.4%
A report on durable goods orders released on Friday showed an increase of 0.4%, below expectations. Durable goods orders in the US rose 0.4% MoM in August to $ 232.8 billion, 1.2% MoM below expectations.

However, it was the fourth straight month of growth. Orders for transport excluding exports grew by 0.4% MoM, which also fell short of expectations by 1.2% MoM. Excluding defense, orders increased by 0.7% MoM. Machinery showed an increase of 1%. 5% m/m.

The fall in demand was partly due to a 4.0% drop in vehicle sales, as the deferred demand due to stops shows signs of exhaustion. The growth in major orders suggests that, although it is slowing, the recovery of capital investments does not stop, but starts from the best places. The US dollar index did not respond to these numbers and most recently gained 0.23% on the day to 94.55.