Investors should shift their bets in forex that the Euro will strengthen further against the Japanese Yen as speculation of a widening yield gap decreases, according to Yuji Kameoka, an analyst at the Daiwa Institute of Research which is a unit of Japan's second largest brokerage.
In forex, the Euro gained 6.8 percent against the Yen this year. The European Central Bank (ECB) has increased interest rates five consecutive times since December to 3.25 percent while the Bank of Japan (BoJ) lifted its borrowing rates only once in July to 0.25 percent. Decreased business confidence in Germany and the indication of slowing inflation in the European region are causing the markets to rethink their bets on interest rate hikes by the ECB in the next year. ``Expectations of a widening gap between rates are dwindling, putting pressure on the euro against the yen,'' Kameoka, a currency analyst in Tokyo, said in an interview today.
In forex trading, the Euro bought 149.05 Yen at 7:42 am in London from 149.03 Yen in New York trading yesterday. It had risen to a record high of 150.73 Yen on August 31 which is the strongest since the debut of the Euro in 1999.
If you have enjoyed this post please feel free to Subscribe to the Free Forex Trading HQ Newsletter.
We recommend trading forex with Easy-Forex.
