US Markets

BUZZ-COMMENT-Dollar loses haven luster vs yen as election, relief clouds grow

Credit: REUTERS/DADO RUVIC

USD/JPY fell on Tuesday, and its inability to retain gains during the previous session's stock market sell-off bodes ill for the dollar as the election and winter approach with diminished chances of renewed pandemic fiscal aid anytime soon.

Oct 27 (Reuters) - USD/JPY fell on Tuesday, and its inability to retain gains during the previous session's stock market sell-off bodes ill for the dollar as the election and winter approach with diminished chances of renewed pandemic fiscal aid anytime soon.

With the Senate out of session there's increasing skepticism of a relief bill passing before the Jan. 20 inauguration, at the heart of a winter that may challenge pandemic containment and the economy, along with the dollar.

Failure to surmount USD/JPY resistance at 105.055 on EBS Monday also painted a dispiriting technical picture.

USD/JPY was probing support by 104.50 , as Treasury yields and U.S. stocks drifted lower in the wake of strong durable goods and a slip in October consumer confidence due to diving expectations, even though present situation readings rebounded .

A USD/JPY close below 104.50, the 76.4% Fibo of its September-October recovery from 104 to 106.11 on EBS, would put 104 in play again. A close below 104 would signal the dollar has ceded the role of top haven currency back to the yen, a role it normally assumes at the outset of risk-aversion shocks.

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Charthttps://tmsnrt.rs/37Krhkx

(Randolph Donney is a Reuters market analyst. The views expressed are his own.)

((Randolph.donney@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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