Dollar holds slightly firmer ahead of European morning trade

The dollar is holding slightly higher across the board so far today, as we head into the final stretch of June and Q2 trading. The main pair to watch is still USD/JPY, with price now testing waters above the 161 mark. Where art thou Tokyo?

As a reminder, the pace of the weakness in the Japanese yen is a key factor to watch in case for intervention. Before the Japan MOF and BOJ stepped in the last time, we saw a surging run of roughly 500 pips in two days. This time, the run higher of 600 pips has took nearly a month. That said, it is very much one-way traffic and we’ve now crossed the key threshold of 160. Is that reason enough to keep a lid on things before they get too far again?

Otherwise, it seems like the nature of intervention by Japanese officials is getting rather predictable. Then again, they can’t do much else considering the fundamentals in play I guess.

Looking elsewhere, EUR/USD is down 0.15% to 1.0685 and GBP/USD down 0.13% to 1.2623 on the day. Just be mindful of large option expiries for the former, layered around 1.0650 to 1.0725.

Besides that, commodity currencies are struggling despite the risk mood holding up. AUD/USD is down 0.3% to 0.6623, not helped by overnight comments from RBA deputy governor Hauser here surely. Meanwhile, USD/CAD is seen up 0.2% to 1.3730 as it keeps a bounce off its 100-day moving average from earlier this week.

This article was written by Justin Low at www.forexlive.com.