Happy Holidays

As the Thanksgiving holiday nears and with it the expected lack of activity on FX markets the EUR surprised a few people by making new highs against the Japanese Yen this morning.A rise in short term market rates also helped the euro. Euro-priced bank-to-bank lending rates rose on Tuesday after the amount of extra money in the financial system fell to its lowest level in more than two years.With Japanese commercial orders staying out of the market the move could be construed as early squaring up positions ahead of Thursdays holiday in the US.In the absence of any other news geopolitical events have taken precedence after two unarmed U.S. B-52 bombers on a training mission flew over disputed islands in the East China Sea without informing Beijing. That was in defiance of China’s declaration of a new airspace defense zone that covers the skies over islands at the heart of a territorial dispute that China has with Japan.Though currencies did not react given the sparse number of players in the market and the absence of liquidity any further escalation could lead to a spike in volatility.US data on Tuesday showed that Americans were still worried about jobs and earnings as consumer confidence fell however numbers that showed that permits for future home construction  rose to a five year high somewhat mitigated the gloom.Non Farms Payroll numbers are now eagerly awaited on Decemeber 6th.

 

About Hetal Patel - Chief Editor, Europe

Hetal Patel has written 58 post in this blog.

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