Dollar Retains Position Against Yen

Friday, the dollar retained its position against the euro and yen. However, industry insiders believe that the currency can be at a risk in case the jobs data in the US does not meet expectations. It will not help if new speculations come up about additional monetary easing from the Federal Reserve in the US. At $1.3150, the euro did not fluctuate Friday following a dip Thursday. The drop was a result of the European Central Bank (ECB) not giving strong-enough indication that there will be additional stimulus.

Investors Following Bond Auctions, Jobs Data and Elections 

Some of the events investors have been following closely are the bond auctions in Spain, the jobs data to be released in the US and the Greek and French elections over the weekend. One of the moves by the ECB that was in keeping with what investors expected was the retention of its rate at 1%.

Economists expect the payrolls report to show 170,000 in gains for the previous month. If the results are not close to this, the dollar will be under pressure. FX strategist Rob Ryan stated that the situation is similar to when the data is not strong, pricing is done more on what can be expected in QE3. As a result, the dollar dips. This is in light of the likelihood that the Fed will start another round of bond purchasing.

Dollar at Risk if Currency Speculators have Huge Short-Positions

Against the yen, the dollar maintained its position at Y80.18. This is above Y79.64, a ten week low the currency reached Tuesday on the EBS trading platform. According to traders, there are low chances that market positioning will be beneficial for the dollar versus the yen. Many believe that currency speculators are still retaining huge short-positions in the Japanese currency. If this is true, and the bets are unwound, the yen could rise against the US currency.

According to data from last week, net short positions held by currency speculators by end of week – April 24 – in the yen was close to 56,000 contracts. It is just 11.5 thousand contracts short of what was recorded as the largest in close to 5 years, March end this year.