At time of writing, (7.19am GMT), the USD/JPY is down 0.52%, trading at 82.75, after comments made by the Fed Chairman Ben Bernanke effectively insisting that further stimulus in the delicate US economy is not ruled out. This sparked some heavy profit taking in both the USD and the commodity markets as investors found solace in the safe haven Japanese Yen. As the Japan 225 stands at 0.71% down, valued at 10182.57, investors saw the Yen cheap enough to move out of the greenback and into the Yen.

The weakened USD saw the US Dollar Index fall to 79.17, down 0.13%. However, Gold, the traditional hedge to the USD made heavy falls so far, down 0.49%, trading at 1679.35 a troy ounce. Similar falls were seen in Silver, also down 0.49%, trading at 32.457, as investors cashed in gains made earlier in the week.

A wait and see policy seems to have been adopted by those not moving into the Japanese Yen as economic data released from the US highlighted its subdued housing market. The Standard & Poor’s/Case-Shiller U.S. house price index dropped at an annualized rate of 3.8% in January, as forecast but still disappointing markets. Also, the Conference Board in the US reported that consumer confidence index fell to 70.2 for March from a revised 71.6 for February, only slightly worse than expected but still combined with Bernankes comments was enough to see moves away from the USD. A big beneficiary of the move, other than the JPY, appears to be the Euro. Talk of extending the bail out fund to 1 tr euros and investors enjoying a lull (possibly the calm before the storm) in negative data, meant that the EUR/USD was up 0.32%, trading at 1.3356.

Expect increased volatility today when
9.30am GMT – GBP – GDP – quarterly figures
1.30pm GMT – USD – Core durable goods order figures (MoM)

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