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Forex pairs in this Article » EUR/JPY, EUR/USD (Barcelona) - Derek Halpenny, European Head of Global Market Research at the Bank of Tokyo Mitsubishi UFJ feels that if the yen is to correct stronger then this could have some influence on EURUSD with EURJPY sales potentially dragging EURUSD lower too.

He sees that volumes in January in the foreign exchange markets jumped sharply mainly due to the volatility of the yen and that's where the large short term positions now lie. He notes that ECB President Draghi, in Spain yesterday, tried to play down the current talk of 'currency wars' describing the talk as "way, way over done".

Halpenny notes that he also appeared to admonish France by stating that some comments by people whose mandate is not immediately related to monetary policy were "inappropriate or fruitless". President Hollande has recently remarked on creating a foreign exchange policy for the euro-zone. He writes, "That was always a stretch in our view. Now not only would you need to get agreement amongst 17 countries but now also agreement with the ECB, which outside extreme circumstances, will always be opposed to the design of a foreign exchange policy. The BOE quarterly inflation report is the key event from Europe today at 1030 GMT. We already know from the statement last week that inflation forecasts will be higher, growth probably lower - the usual unwelcome mix for the pound."
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