The USD fell below 105 after May’s PMI report was published by S&P Global last week. The DXY index, which measures the performance of the U.S. dollar shows it currently trading at the 104.7 price range. The U.S. dollar is dipping in the charts this week leading to other currencies, like the Japanese yen heading north.
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However, despite the dip, currency traders are taking entry positions in the U.S. dollar and not the Japanese yen. The forex market continues to see buyers in the U.S. dollar against the Japanese yen for close to two months.
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The latest data shows that currency traders are buying the dips on the U.S. dollar. The development cements the USD’s resistance helping it to bounce back harder when the markets return to normalcy. Therefore, despite the current dip against the Japanese yen, the U.S. dollar has more chance of climbing above the 106 mark.
U.S. Dollar vs The Japanese Yen
The Japanese yen is the hardest hit currency this year against a raging U.S. dollar. The yen fell to its 34-year low against the USD and currency traders have no hopes of a quick turnaround. On the other hand, the USD is bouncing back harder this year against all leading currencies in the forex markets.
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The dollar has already trumped over 22 out of 23 top currencies in the Asian markets. The Japanese yen, Chinese yuan, and the Indian rupee have all shed significantly against the U.S. dollar.
Analysts predict that the U.S. dollar could reclaim its 107 price range during the second half of the year. The conflicts in the Middle East are what’s making institutional funds seek haven in the USD. The currency is now consolidating in the charts and a leg-up could take it to the 106 to 107 level in the coming next months.