Yen Falls

The Yen fell on Monday as rising stock markets helped to promote risk appetite and sent many investors in search of Forex opportunities offered by higher yielding currencies. Trade in the US was subdued due to the Martin Luther King national holiday. Concerns about the troubled US financial sector receded reducing demand for safe haven currencies such as the US dollar and the Japanese Yen.

Analysts Cautious About Sustainability of Gains

Some analysts stated the Forex market was cautious about the sustainability of gains in share prices and remain cautious about the global economy. Yousuke Hosokawa, treasury department senior manager at Chuo Mitsui Trust and Banking Co. stated, “The currency market lacks direction and is moving within limited ranges. Gains in U.S. shares were within the range of rebounds and the U.S. financial sector still faces difficult times.” The return of risk appetite is providing short term Forex opportunities for many investors.

Bank of America and CitiGroup Report Losses

Both Bank of America and Citigroup both reported multibillion dollar quarterly losses on Friday. CitiGroup indicated they would split into two operating units. Despite massive Government intervention, many investors remain wary of the fate of Citigroup and the US financial sector in general.

Many Forex traders remained on the sidelines in anticipation of Obama’s inauguration on Tuesday. The incoming administration’

s monetary policies will affect available Forex opportunities and currency markets globally.

Dollar and Euro Rise

The dollar rose 0.4% from late New York trade on Friday to 91.03 Yen while the euro climbed 0.7% 121.50 Yen, and climbed by 0.3 % to $1.3348. The dollar index was down 0.7% at 83.587. Investors took advantage of Forex opportunities offered by higher-yielding currencies such as the Australian and New Zealand dollars which are seen as a measure of risk appetite. The Australian Dollar rose 0.8% to $0.6786 and against the yen was up 0.4% t at 61.78 Yen. The New Zealand dollar rose 0.6% to $0.5511 and 0.2% to 50.15 Yen.

New Administration, New Policies

A new administration takes the reins pf power in Washington Tuesday and will most likely make the economy a very high priority. Just how those unannounced policies will affect markets and Forex opportunities remains to be seen.