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HISTORICAL DETAILS
% Change
1 Wk -0.20%
1 Month -1.21%
3 Months -4.22%
6 Months -4.23%
1 Year -8.65%
52 WEEK
High 88.12
Low 76.25
BLOOMBERG MEDIAN FORECASTS
Q2 2011 83.00
Q3 2011 83.00
Q4 2011 85.00
Q1 2012 87.50
DAILY DETAIL
Overnight, USD/JPY traded in a tight range of 78.94 to 79.16, as participants continued to speculate on the upcoming debt ceiling impasse. US Treasury Secretary Timothy Geithner let everyone know that there really is no ‘plan B’, although there will be a debt ceiling increase with lawmakers having definitively taken a default off the table. Morgan Stanley also suggested that it sees a zero probability that the US treasury will miss an interest or principal repayment. However, it believes there is a small chance that there could be delays in payments on other obligations, which could trigger a downgrade. Morgan Stanley suggested that just like in the case of Japan, a debt downgrade would have a short-term impact on risk assets; this is an area of contention and there are, however, many who suggest it could have much longer-term ramifications. The market is now positioned short of USD’s and long JPY, so a resolve or agreement by the US political parties could see upside for USD/JPY. However, this is far from certain, so it is feasible we are going to see the pair trade in a narrow range until the market gets further clarity on the matter. Catalysts tonight include further rhetoric from US politicians on the debt ceiling and US housing starts, which are expected to grow 2.6% to 575,000, plus building permits, which are anticipated to fall 2.7%. Chris Weston, Australia
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