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USD FINALLY BREAKS ABOVE 123 YEN

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USD FINALLY BREAKS ABOVE 123 YEN

May 27 2015, 06.33am GMT

STOCK.com

In the North American trading session on Tuesday, the U.S. dollar (USD) ended at its highest level since 2007 against the yen (JPY), while the dollar also gained strongly against the euro (EUR).

On the same day, economic data was released out of the U.S. which showed that April sales for durable U.S. goods dropped by 0.5% seasonally adjusted. This was in line with economist expectations surveyed by MarketWatch. Investors kept their focus on the core-capital goods figure, which is usually interpreted as a business investment proxy. In April it rose 1%, marking a 2nd straight monthly gain.

After the durable goods report, the dollar managed to rise higher than 123 yen. Since July 2007, this is first time the greenback is above this level. Compared to trading at ¥121.55 on Monday, the USD recently traded at ¥123.13 and thereafter hit a high of ¥123.33 after reports from the Conference Board indicated that in May, there was a slight increase in consumer confidence while the Commerce Department stated that new homes sales in the U.S bounced back in April.

The reports on Tuesday added to a flood of strong data last week that provided more evidence that first quarter economic slowdown was due to transient factors, reiterating claims by the Federal Reserve.

For the 1st time in 5 weeks, on Friday, the USD also ended higher against the euro (EUR). In the North American trading session, the euro ended near a 1 month low against the U.S. dollar. Recently the shared currency traded down at $1.0871 from $1.5475 on Monday.

Due to concerns on the Greek default, the euro slipped lower, according to analysts. These concerns were driven by comments by Nikos Voutsis, Greece’s Interior Minister, over not being able to repay the money to the International Monetary Fund (IMF) next month, depending though if the country can strike a deal with creditors internationally over extended rescue funding.

Greece is meant to repay $1.76 billion to the International Monetary Fund between 5 and 19 June.

Furthermore, the ICE U.S. Dollar Index (DXY) increased 1.3% to 97.2700. This marked the 1st time this index has been above the 97 level in about one month.

MT4 Chart: USD/JPY

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