FX GLOBAL CALL: Our Take on the Day's Big FX News


        By Brian Baskin 

    1. The yen is falling against the dollar again, after Japanese Economy Minister Akiri Amari walked back comments he had made earlier in the week that implied the currency risked weakening too quickly. "My view is that the currency market is still in a phase of correcting from excessive yen strength," Mr. Amari told The Wall Street Journal. "That was the case back then and is the case now." And with that, the yen is back at 89.38 to the dollar. Investors appear to be wary of selling the currency beyond the psychologically important 90 level. But it may be only a matter of time, as the Bank of Japan is facing heavy government pressure--including from Mr. Amari--to adopt a 2% inflation target at its meeting next week.

    2. Unemployment is on the rise in Australia, even in the once-bulletproof mining sector. The jobless rate hit 5.4% nationwide, with mining states Western Australia and Queensland both seeing an increase. It is clear that the Reserve Bank of Australia's interest-rate cuts haven't shielded the country's economy.

    3. The Swiss franc is still on the retreat against the euro, reaching 1.2457 against the common currency, its weakest level since October 2011. Traders say they are taking the franc's move more seriously than any other since the Swiss National Bank imposed its 1.20 exchange-rate floor in September 2011. There is even talk of the franc returning to its historic role as a funding currency--something investors borrow in order to buy higher-yielding currencies. If that happens, expect more declines for the franc.

    4. The Hungarian forint is one of those higher-yielding currencies, and a government official made a plea on local television for more people to buy it. Mihaly Varga, the minister in charge of Hungary's loan negotiations with the International Monetary Fund, said Hungary could benefit from an exchange rate between 275 and 285 forint to the euro, which would make it easier to pay back loans in foreign currencies. The forint strengthened nearly 0.7% against the euro, trading recently at about 293.

    5. The Philippines can continue to grow 6% to 7% in 2013 without overheating, the country's central-bank governor told a local governor. While plenty of analysts agree, Credit Suisse notes that 2014 could be rough if the central bank continues to rely on low interest rates to keep the economy humming.

    6. The euro zone's debt market continues to be a model of stability, with Spain and Ireland holding successful debt auctions. Spain's bond sale was in the spotlight, with Spain hitting the top of its 4.5 billion euro ($5.98 billion) target and steady yields. The auction helped a bit with concerns that Spain could struggle with an ambitious debt-issuance plan this year. The euro hit a high for the day of $1.3371 after the sale.

    7. Another busy data day in the U.S.:

    8:30 a.m. EST--December Housing Starts: 890,000 (+3.4%) expected

    8:30 a.m.--December Building Starts: 905,000 (+0.6%) expected

    8:30 a.m.--Weekly Jobless Claims: 370,000 expected

    10 a.m.--January Philadelphia Fed Survey: 5 expected

    (Brian Baskin is assistant managing editor for the Americas at DJ FX Trader, a foreign-exchange news service jointly produced by Dow Jones Newswires and The Wall Street Journal.)