Forex - Japanese yen strengthens on safe haven buying on Iraq

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Investing.com - The Japanese yen reversed course and strengthened on safe having buying on Monday in Asia with the market focused on events in Iraq with sources saying that Iran and the United States will discuss the sectarian tensions this week as part of broader talks about Tehran's nuclear program.

USD/JPY traded at 101.87, down 0.12%, after a weak start.

The Reserve Bank of Australia's Christopher Kent, assistant governor (Economic) speaks in Sydney on "Labour Markets" (at 1320 Sydney, or 0320 GMT.) But there is no data in Australia, China or Japan.


AUD/USD held at 0.9392, down 0.11%.

Last week, the dollar ended flat against a basket of other major currencies as escalating tensions in Iraq underpinned safe haven demand for the greenback, offsetting an unexpected decline in U.S. consumer confidence.

Concerns over the ongoing Sunni insurgency in Iraq remain and are affecting the broad investment markets because of the potential to disrupt oil flow and spark wider clashes in the region, particularly among the Shite and Sunni branches of Islam. Iran is Iraq's neighbor, though the two countries fought a bitter war through much of the 1990s.

The escalating violence in Iraq overshadowed a report showing that U.S. consumer sentiment unexpectedly deteriorated in June.

The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.08% to 80.69.

In the week ahead, investors will be focusing on the outcome of Wednesday's Federal Reserve policy meeting, while Monday's preliminary report on euro zone inflation will also be closely watched.

Also on Monday, Canada is to publish a report on foreign securities purchases.

The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.

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This article appears in: Investing , Forex and Currencies

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