Euro Falls To Recent Lows, Investors Wary Of Yen

The Euro went on to re-test its recent low versus the US Dollar during early trading on Monday after growing uncertainty over Spain and Greece hampered the currency.
Meanwhile the Japanese Yen was helped by Japanese repatriation ahead of the half-year book-closing due at the end of this month. Investors remain wary about a possible Japanese intervention kept the currency under control.

 

The Yen was at its strongest in over a week against the Euro earlier today. This was ahead of a report due today, that may indicate that business confidence in Germany is near to its lowest level in more than two years.

The Ifo institute's business climate index is expected to come in at 102.5 for September. The index had fallen to 102.3 in August, its lowest level since March 2010. The index is a gauge of confidence among German executives.

On Friday Greece's troika of creditors: the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission, announced that they will take a "brief pause" for a week after making "good progress" in talks around Greek budget cuts.

The market is still absorbing the effects of Spain possibly seeking a bailout and as a result of a confluence of factors, what I expect to see is that investors will regard the Yen as the current best safe haven. The Yen usually strengthens during periods of financial turmoil as Japan isn't reliant on foreign capital due to its current account surplus.

The Fundamentals in Europe are looking weak, mainly because of austerity measures.

The Yen gained 0.4% to 101.04 per Euro earlier today, near to its strongest level since the 14th of September. The Yen reached 78.05 per Dollar, 0.1% higher than its close on Friday.

The Euro declined 0.3% to $1.2944.

The Bank of Japan (BOJ) released its August minutes earlier today that show that Japan's economy has returned to a recovery path and that it will implement monetary easing seamlessly.