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Forex - USD/JPY gains as geopolitical tensions fade

Published 08/11/2014, 12:09 PM
Updated 08/11/2014, 12:10 PM
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Investing.com - The dollar firmed against the yen on Monday after geopolitical tensions in Eastern Europe and the Middle East began to subside, which chipped away that the Japanese currency's appeal as a safe haven to military conflicts.

In U.S. trading, USD/JPY was up 0.11% and trading at 102.15, up from a session low of 102.03 and off a high of 102.20.

The pair was expected to test support at 101.51, Friday's low, and resistance at 102.92, last Tuesday's high.

Military conflicts in global hotspots waned over the weekend, which gave the dollar room to post gains against its Japanese counterpart, the beneficiary from recent geopolitical tensions.

Reports that Russia has ended the military exercises it was conducting near the Ukraine border gave the dollar room to rise in a session void of major market-moving indicators.

Russian President Vladimir Putin said Moscow is working with the International Red Cross to send humanitarian aid to Ukraine, which also gave the greenback support.

Meanwhile in the Middle East, a 72-hour ceasefire between Israel and Hamas in Gaza took effect on Sunday, which gave the dollar further room to rise by allaying concerns that geopolitical tensions will dampen global growth and possibly prompt the Federal Reserve to take more time analyzing the economy before raising interest rates.

A U.S. decision to launch airstrikes in Iraq to halt a Sunni insurgency gave the greenback support as well, as fears that the country was on the edge of chaos ebbed on Monday as well.

The yen, meanwhile, was up against the euro and down against the pound, with EUR/JPY down 0.10% at 136.71, and GBP/JPY trading up 0.18% at 171.45.

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