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JPY: The dollar has been confined to about a third of a yen at the upper end of yesterday's ranges. Initial support is seen in the JPY107.40-50 area. The dollar has closed above JPY118 once in recently and that was December 15. In thin markets, the dollar is making higher highs and higher lows this the third session. The 10-year spread is steady around 2.50%. Note that the BOJ appeared to be somewhat less active in the long-end of its curve, suggesting the recent stepped up action was a result of the speed of the move possibly rather than the level

Dollar-bloc and Scandis: These are the strongest currencies today. As far as I can reckon there are two forces here. First is the thin holiday demand having exaggerated impact. Second, there does seem to be some end-of-year parking of funds in high yielders.

Marc Chandler
Global head of currency strategy at BBH
Brown Brothers Harriman

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