171 Quotes by Adam Cole

The yen has gained on the vote of confidence in the Japanese economy, and that rates may start to rise sooner than expected.

The yen did gain on the inflation numbers initially. It then took out some key levels and we saw a massive bout of short-covering in dollar/yen.

This left orders in the fourth quarter up an impressive 4.1% quarter-on-quarter and points to strong capital spending in the early months of 2006, which will likely make the Bank of Japan that much more confident that the time is approaching to start removing its ultra-easy monetary policy.

It's almost exclusively the rate outlook driving things in the sense that at the beginning of this week the market was 50/50 priced for a third rate hike this year with two priced in with certainty, but as things stand now even a second hike is looking questionable.

(Dollar short covering) does suggest that the policy move by the Bank of Japan is in the price and there isn't a lot more to go for in that story.

It's just a bit of profit-taking and general nervousness.

The retail sales report makes it more likely at the margin to cause rate cuts. The balance of risks is that the next BOE rates move is lower, which would be negative for sterling.

It's notable that CAD has participated less in the gains against the U.S. dollar than most currencies have seen.

It's relatively limited at the moment, but if this does not resolve itself quickly there could be a very undesirable effect. Inflation is going to be higher than it would otherwise, against an otherwise healthy economic picture.