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USDJPY Rises Above 117.00 To Five-Year High, CAD Outperforms

  • Mixed headlines on Friday prompted two-way action for the greenback. Newswires suggesting that Putin acknowledged progress in diplomatic ties weighed on broad dollar indices in the early stages of NY trade with EURUSD briefly spiking to a session high of 1.1043.
  • However, markets appeared reluctant to read too much into the validity of these comments and currency moves were faded. Throughout the course of the US session, the early moves gradually and consistently unwound, with the US dollar gathering positive momentum as it traded through the best levels of the day. EURUSD eventually grinded back to the low 1.09s ahead of the close, erasing the entirety of Wednesday’s relief rally.
  • It was the significant weakness in the Japanese Yen that was most pertinent on Friday. Following the overnight break of the Jan/Feb highs at 116.35, USDJPY saw decent momentum buying and has extended the intraday advance to 1%, rising above the 117 handle to print fresh five-year highs at 117.31 on Friday.
  • The technical break has prompted some bullish trade recommendations with TD securities suggesting the pair can advance to 120 with 116.35/40 now acting as strong support going forward.
  • The divergent outperformer on Friday, in the face of general USD strength was the Canadian dollar. CAD optimism largely attributed to a stellar February employment report where the economy added 336k jobs versus the expected +127k net change.
  • USDCAD has fallen -0.4% to leave the pair around 1.2715, roughly in the middle of the post-invasion range, however, CADJPY has risen just shy of 1.5% to a four-month high and will eye the October highs around 93.00 as its next target.
  • Worth noting the daylight savings adjustment will occur over the weekend in the US. Focus inevitably turns to the March Fed meeting where the FOMC are expected to commence rate hike lift-off. Additionally, the Bank of England meeting is scheduled for Thursday. In terms of data, US retail sales and Canadian CPI headline the docket.

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