USD/JOPY licking its wounds follownig Friday's surge on Wall Street
- USD/JPY hobbles along in the higher 104 area following Friday's drop.
- US coronavirus spread is keeping the dollar at bay.
USD/JPY is trading at 104.66 between a range of 104.55 and 104.77 and around 0.09% up on the day so far.
USD/JPY fell from 105.15 to 104.60 despite the US equity rally on Friday as a shift to the yen and away from dollar's has been a preferable play in markets of late, concerned for the spread of covid throughout all states.
The dollar is also vulnerable to what happens in the race for the Senate and it is not a foregone conclusion that the GOP will hold onto it. More on that here: S&P 500 Index Weekly Forecast: Looking through the vaccine, plenty in play
Eyes on the Fed
The greenback is heavy as markets anticipate more from the Federal Reserve or a combination of the central bank and fiscal easing in the New Year.
In fact, Standard Chartered analysts suggested that the Fed could even ease policy again prior to the December meeting considering the huge surge in COVID-19 infections and the stumbling over further stimulus in a now 'lame duck' Congress.
Japan's Q3 GDP preliminary 5.0% QoQ vs. expected 4.4%, yen unchanged
Meanwhile, in the latest data from Japan, the Gross Domestic Produce arrived better than expected.
GDP posted the fastest expansion since comparable data became available in 1980.
Private consumption rises for the first time in four quarters, marks the fastest pace of gain since comparable data became available in 1980.
For the day ahead, the November Fed Empire State manufacturing index will be buoyed by recent strength in orders and employment, but renewed concerns around restrictions pose a risk.
We also have the Fed's Vice Chair Clarida speaking who will discuss the economic outlook.