Major General Robert Rennie CB CMG DSO MVO VD (December 15, 1862 – December 17, 1949) was a Canadian businessman and army officer. (wikipedia)
Traders have jumped on the headline and people have shouted out China is going to make the currency convertible. China is not going to make the currency convertible; they are going to allow domestic investors to invest in foreign markets.
The market is misreading and misunderstanding the story. The story is the capital account, not, I repeat not, the current account.
Machinery orders are important and the better-than-expected numbers will be yen-supportive.
Today's economic index confirmed the Japanese economy is in a solid recovery. That's yen supportive.
It's pretty quiet out there and the ranges are likely to hold.
As long as economic data meet and beat expectations, the dollar will continue to strengthen. The Fed has a good reason to be pro-active rather than passive. The ECB has good reason to be passive rather than pro-active.
The report will be positive for the dollar. Along with a good prospect for the GDP report due Oct. 28, we will see the dollar remain strong this week.
I'd be surprised if the BOJ raises rates at all this year and that is something that will tend to see the yen underperforming.
Underlying interest rates still remain very supportive for the U.S. dollar.
The yen is weakening so much versus other currencies. The pace of decline of the yen is causing stress and strain within Asia, where central banks may be showing some concern.