- January 24, 2022
- Posted by: Stratford Team
- Category: Economy
The US dollar broke higher against the yen to start the year. It traded up to JPY116.35, its highest level in five year. However, within a few days it became clear that it was a false breakout. The dollar moved back within its old range (~JPY113-JPY115 +/- 0.5 yen). Indeed, the greenback finished last week near JPY113.65.
Ok, if the dollar is going to weaken, the euro is a major beneficiary. After trading mostly $1.12-$1.14 since mid-November, the euro broke higher and set a two-month high on Jan. 14 slightly below $1.1485. This break also proved to be a head fake.
Frustratingly, correlations like the yen and US rates, and the Canadian dollar and US stocks have broken down. That said, risk-off broadly has lifted the yen to the top of the major currencies through the first three weeks. It is up about 1.2%. The Canadian dollar is second best, with an almost 0.8% gain. Currencies which typically do well when growth and risk appetites are strong, like the…
