Investing.com - The dollar ended the week lower against the safe haven yen on Friday as concerns over a U.S. government shutdown and ongoing uncertainty over the future direction of U.S. monetary policy weighed.
USD/JPY hit session lows of 98.10 on Friday, the lowest since September 19, before settling at 98.24, down 0.78% for the day. For the week, the pair was 0.50% lower.
The pair is likely to find support at 97.75, the low of September 18 and resistance at 99.03, Friday’s high.
Demand for the safe haven yen was boosted amid concerns that political wrangling in Washington could lead to a government shutdown and create a drag on fourth quarter economic growth.
Congress must pass a short-term budget by midnight on Monday in order to avoid a government shutdown.
Republican opposition to the funding of the Affordable Care Act has created a standoff with the White House and the Democratic-controlled Senate, which have both said they will not support any budget bill that defunds or amends Obamacare.
Later this month, Congress will also have to extend the U.S. debt ceiling which the U.S. Treasury Department has estimated will be reached by October 17.
Sentiment on the dollar remained negative following the Federal Reserve’s unexpected decision earlier this month to maintain its USD85 billion-a-month asset purchase program.
Data on Friday showing that U.S. consumer sentiment fell to its lowest level in five months underlined concerns over the outlook for the economic recovery.
The final reading of the University of Michigan’s consumer sentiment index fell to 77.5 in September from a reading of 82.1 in August, the lowest level since April.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report, for indications on whether the economic recovery is sufficiently strong for the Fed to start rolling back its stimulus program.
Markets will also be closely watching developments in U.S. budget negotiations, as well as the outcome of the Bank of Japan’s latest policy meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 30
Japan is to release a series of economic data, including reports on housing starts, retail sales and industrial production.
The U.S. is to release a report on manufacturing activity in Chicago.
Tuesday, October 1
Japan is to release data on household spending and average cash earnings, as well as reports on manufacturing and service sector activity.
In the U.S., the Institute of Supply Management is to produce a report on manufacturing activity, a leading economic indicator.
Wednesday, October 2
The U.S. is to release the ADP report on nonfarm payrolls, which leads the closely watched government report by two days.
Thursday, October 3
The U.S. is to release the weekly government report on initial jobless claims along with data on factory orders. Meanwhile, the ISM is to produce a report on non-manufacturing activity, a leading economic indicator.
Friday, October 4
The BoJ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The rate announcement is to be followed by a press conference.
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average hourly earnings.
USD/JPY hit session lows of 98.10 on Friday, the lowest since September 19, before settling at 98.24, down 0.78% for the day. For the week, the pair was 0.50% lower.
The pair is likely to find support at 97.75, the low of September 18 and resistance at 99.03, Friday’s high.
Demand for the safe haven yen was boosted amid concerns that political wrangling in Washington could lead to a government shutdown and create a drag on fourth quarter economic growth.
Congress must pass a short-term budget by midnight on Monday in order to avoid a government shutdown.
Republican opposition to the funding of the Affordable Care Act has created a standoff with the White House and the Democratic-controlled Senate, which have both said they will not support any budget bill that defunds or amends Obamacare.
Later this month, Congress will also have to extend the U.S. debt ceiling which the U.S. Treasury Department has estimated will be reached by October 17.
Sentiment on the dollar remained negative following the Federal Reserve’s unexpected decision earlier this month to maintain its USD85 billion-a-month asset purchase program.
Data on Friday showing that U.S. consumer sentiment fell to its lowest level in five months underlined concerns over the outlook for the economic recovery.
The final reading of the University of Michigan’s consumer sentiment index fell to 77.5 in September from a reading of 82.1 in August, the lowest level since April.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report, for indications on whether the economic recovery is sufficiently strong for the Fed to start rolling back its stimulus program.
Markets will also be closely watching developments in U.S. budget negotiations, as well as the outcome of the Bank of Japan’s latest policy meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 30
Japan is to release a series of economic data, including reports on housing starts, retail sales and industrial production.
The U.S. is to release a report on manufacturing activity in Chicago.
Tuesday, October 1
Japan is to release data on household spending and average cash earnings, as well as reports on manufacturing and service sector activity.
In the U.S., the Institute of Supply Management is to produce a report on manufacturing activity, a leading economic indicator.
Wednesday, October 2
The U.S. is to release the ADP report on nonfarm payrolls, which leads the closely watched government report by two days.
Thursday, October 3
The U.S. is to release the weekly government report on initial jobless claims along with data on factory orders. Meanwhile, the ISM is to produce a report on non-manufacturing activity, a leading economic indicator.
Friday, October 4
The BoJ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The rate announcement is to be followed by a press conference.
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average hourly earnings.