Will the rebound in cross-yen pairs continue?
12.07.2021
- Williams (U.S.): Remarks by the President of the New York Fed
- Kashkari (U.S.): Remarks by the President of the Minneapolis Federal Reserve Bank
Last weekend, U.S. stock prices rebounded, with all three major stock indices rising; the Nasdaq closed at 14,701 points, up 142 points from the previous day. While the overall market sentiment was risk-on, the Skew Index—which quantifies market distortions—fell back to 155, suggesting that the sense of overheating has subsided. The Fear Index (VIX) also declined to 16.1.
In the foreign exchange market, cross-yen pairs that had been falling rebounded, with GBP/JPY recouping the previous day’s losses and rising by about 250 pips from 150.66 to 153.22. However, since the pair remains below the 20-day moving average on the daily chart, we need to carefully assess whether the yen selling trend will continue. EUR/JPY also rebounded, rising from 129.6 to 130.8.
Today, during European trading hours, the Swiss unemployment rate will be released at 16:00, followed by South African manufacturing production at 20:00. During U.S. trading hours, remarks by William, President of the New York Fed, are scheduled for 22:30, followed by a U.S. 3-year Treasury auction at 24:30, and remarks by Kashkari, President of the Minneapolis Fed, at 25:00.and at 02:00, a U.S. 10-year Treasury auction. Looking ahead to this week, with the U.S. Consumer Price Index on Tuesday the 13th, policy rate announcements from New Zealand and Canada on Wednesday the 14th, and U.K. employment data on Thursday the 15th, we will be closely monitoring the situation to see if there are any shifts in the relative strength between European currencies and the U.S. dollar.
Author: Keisuke Sakurai
