Tuesday, October 29, 2013
MONEY FOCUS: Dlr May Be Worth Buying On Nov 8
TOKYO (NQN)--Ever since the U.S. dollar started to weaken against the yen at a faster pace in August, retail investors involved in forex margin trading have noticed a tendency recently for the greenback to hit lows on dates with an 8 in them.
The dollar's decline means a good opportunity for retail investors, who go against market trends, to buy the currency at reasonable prices. The next date with an 8 in it is Nov. 8, the day the U.S. government will release jobs data for October. This data will affect the country's monetary policy, and investors apparently want to see if the greenback depreciates as it did before.
On Aug. 8, the greenback hit bottom at 95.81 yen and saw a double dip on Oct. 8 to 96.55 yen. On Aug. 28 and Sept. 18, it hit short-term lows of 96.81 yen and 97.76 yen, respectively. Although the greenback managed to seesaw in the mid-97 yen level throughout Monday, Oct. 28, the currency may fall again on Nov. 8.
U.S. October employment statistics will come out one week later than scheduled because of the recent government shutdown. The data will also show how the shutdown affected the country's job market, making market players even more anxious for the results. One official at a Japanese bank said it is generally believed that the jobs data will be significantly negative. If the data shows a slower recovery in U.S. employment conditions, the greenback could weaken against the yen in line with speculation that the U.S. Federal Reserve Board will extend its quantitative easing.
A chief technical analyst at Invast Securities Co. (8709) said it is important to see whether the dollar can maintain the low it logged on Oct. 8. Recent highs or lows are seen as psychologically important marks that prompt many investors to place buy or sell orders to limit their losses. If the greenback falls below the low recorded on Oct. 8, dollar selling and yen buying will increase.
-- Translated from an article by Nikkei Quick News staff writer Rie Morita
(Nikkei Quick News, Oct. 29)