Market Analysis by covering: Euro US Dollar, US Dollar Japanese Yen, US Dollar Swiss Franc, Euro Swiss Franc. Read 's Market Analysis on Investing.com
Morgan Stanley expects earnings beats from these nine EU companies in Q4, plus US authorities reportedly getting involved, has prompted a near 3.5% drop since Friday morning. This move has caught the dollar at a weak moment, and pairs likeSuspected Japanese intervention to sell USD/JPY has come at a weak time for the dollar after last week’s geopolitical fracturing.
From what we understand so far, Japanese authorities may have intervened on Friday when USD/JPY pushed above 159 after the Bank of Japan policy meeting. The big kicker, however, was widespread discussion that at the London close at 17:00 GMT on Friday, the Federal Reserve started asking banks in New York about their position sizes in USD/JPY. This was seen as akin to a ’rate check’, where a central bank might be preparing the market for physical intervention. That the Fed was allegedly doing this and not making clear that this activity was purely on behalf of Japanese authorities – i.e., that the Fed was not acting purely as an ’agent’ – has led to understandable suggestions that the US might be on the verge of joint intervention with Japan. This is something we discussed in this month’s FX Talking. The prospect of bilateral Japan-US intervention is understandably a more powerful one than mere passive intervention from Tokyo alone. Why would Washington want to get involved? We see two reasons: a) the weak yen was adding to last week’s JGB sell-off and indirectly driving US Treasury yields higher. If there is any financial instrument more important than the stock market to the White House right now, it is US Treasuries. And b) the strong USD/JPY was potentially unwinding the work of US tariffs on Japan and giving Japanese manufacturers a competitive advantage. However, this is not a fundamentally driven move. Yen real interest rates are still negative, and the snap Japanese election on 8 February could still see more pressure emerge on JGBs and the yen. And away from the geopolitical risk premium being attached to US assets, the dollar’s fundamental story has not deteriorated. Plus, we suspect this week’s FOMC meeting could prove slightly dollar bullish. No doubt, Japanese and potentially US authorities, too, like this constructively ambiguous approach to FX intervention. Traders will be bracing for activity at both market opens and closes now. An upside gap in USD/JPY at 155.65 may now prove intraday resistance. But for the dollar sell-off to continue like this, we will probably need to see some poor domestic US news. Away from the FOMC, this will heighten scrutiny on earnings releases from US Big Tech this Wednesday and Thursday. This yen intervention story has weighed heavily on DXY, where the prospect of up to $100bn of sales has caught the dollar at a weak moment. DXY has an upside gap to 97.42 and has a bias to last year’s lows at 96.20/35 – but really needs some fundamental backing for these moves to sustain.We had not been expecting this kind of EUR/USD strength this quarter, but it seems the combination of last week’s geopolitical developments and potentially large dollar sales from Japan has sent EUR/USD through major resistance at 1.1800/1810. The three themes we mentioned on Friday are generally supportive for the euro. Continued strong flows into emerging market equity ETFs support the global growth theory, while surging gold and the Swiss franc are maintaining the dollar debasement narrative. There may also be a little macro support to the euro story, too. Eurozone PMIs are edging higher – most importantly in Germany. Another good reading from the German Ifo index can prove mildly EUR/USD supportive and could drag EUR/USD back to major resistance at 1.1900/1910. This could still be the top of the EUR/USD range in the first quarter, but let’s see. Also later this week, Friday sees the advance release for the 4Q25 GDP data – expected at 02% quarter-on-quarter in both Germany and the eurozone. 1.1835 is now the intraday support, and 1.1900/1910 resistance. European corporates with USD buying needs must be very pleasantly surprised.is offered near 0.92 and that USD/CHF has broken under 0.7800 will be ringing alarm bells in Zurich. The trade-weighted Swiss franc will now be pushing to new all-time highs, and it would not be a surprise to see the market pricing negative rates in Switzerland again as the Swiss National Bank battles with the strong Swiss franc. If the SNB concludes that better global growth prospects mean that the strong Swiss franc is not a problem, then EUR/CHF trades to 0.90. If this USD/CHF move is to continue, 0.7800/7810 should now prove resistance. A move straight back above 0.7880 would suggest that we are still in a very volatile trading range.This publication has been prepared by ING solely for information purposes irrespective of a particular user’s means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
US Dollar Japanese Yen US Dollar Swiss Franc Euro Swiss Franc
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Week Ahead: Fed, Shutdown Risk, and Earnings Set Up a High-Stakes WeekMarket Analysis by covering: . Read 's Market Analysis on Investing.com
Read more »
Market Rate Cut Expectations Drift as Macro Signals DivergeMarket Analysis by covering: US Dollar Japanese Yen, US Dollar Korean Won, US Dollar Index Futures, Crude Oil WTI Futures. Read 's Market Analysis on Investing.com
Read more »
Silver’s Great Divorce of 2026: Why the $100 Breakout Is Just the BeginningMarket Analysis by covering: Silver Spot US Dollar. Read 's Market Analysis on Investing.com
Read more »
Boeing Earnings Ahead: Expectations Look Surprisingly Low for an Industry TitanMarket Analysis by covering: Boeing Co. Read 's Market Analysis on Investing.com
Read more »
When Tokyo Sets the Tone and Wall Street Taps the BrakesMarket Analysis by covering: US Dollar Japanese Yen, Gold Spot US Dollar, US Dollar Index Futures. Read 's Market Analysis on Investing.com
Read more »
Tariffs, Rate Decisions, and Inflation: Your Week Ahead BriefMarket Analysis by covering: US Dollar Japanese Yen, US Dollar Index Futures. Read 's Market Analysis on Investing.com
Read more »