Forex Market Update: Euro Slips against Yen and the Dollar

The euro slipped against the U.S. dollar and the Japanese yen on Wednesday as traders wait for the G20 summit in Moscow, which will be held later this week. The yen, meanwhile, dropped against the dollar after rallying in the previous trading session.

Speaking to Reuters, Omer Esiner, Chief Market Analyst at Commonwealth Foreign Exchange, said that there is some cross-rate currency activity going on, with selling of euro/yen weighing on euro/dollar. Esiner further said that investors overall are wary to push the yen much lower ahead of the G20 meeting and there is a bias for some give-back after the massive decline of the yen over the past few months.

The yen has weakened significantly this year following aggressive monetary easing measures from the Bank of Japan (BOJ). The BOJ has been facing increasing pressure from Prime Minister, Shinzo Abe, to implement further easing measures to boost economic growth and fight deflation in the world’s third-largest economy. However, the BOJ’s monetary policy has raised concerns that it will eventually lead to currency wars.

On Tuesday, a statement from Group of Seven (G7) nations was expected to calm market participants, who have worried over the prospect of currency wars. However, the G7 statement, instead of calming the market, created even more confusion and caused extreme volatility in the currency market.

Traders are now waiting for the G20 summit later this week.

Nick Bennenbroek, Head of Currency Strategy at Wells Fargo, told Reuters that the moves in the currency market are somewhat lacking in conviction, with markets still in something of a waiting mode ahead of this weekend’s G20 meeting of financial officials.

At last check on Wednesday, the euro down 0.1% to $1.3438. Against the yen, the single currency fell 0.2% to 125.48 yen. The dollar, meanwhile, was up 0.1% to 93.54 yen, at last check.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.