Will the rebound in cross-yen pairs continue?
12.07.2021
- U.S. – Williams: Remarks by the President of the New York Fed
- Kashkari (U.S.): Remarks by the President of the Minneapolis Fed
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.Although the overall market sentiment was risk-on, the Skew Index—which quantifies market distortions—fell back to 155, suggesting that market overheating has subsided somewhat. The Fear Index (VIX) also declined to 16.1.
In the foreign exchange market, cross-yen pairs that had been falling rebounded, and GBP/JPY recouped the previous day’s losses, 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.The euro/yen pair also rebounded, rising from 129.6 to 130.8.
Today’s schedule includes the Swiss unemployment rate at 16:00 European time, South African manufacturing output at 20:00, remarks by U.S. Federal Reserve Bank of New York President Williams at 22:30 U.S. time, a U.S. 3-year Treasury auction at 24:30,at 25:00, remarks by Kashkari, President of the Federal Reserve Bank of Minneapolis; and at 26:00, a U.S. 10-year Treasury auction.This week, with the U.S. Consumer Price Index due on Tuesday the 13th, policy rate announcements from New Zealand and Canada on Wednesday the 14th, and the U.K. employment report 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
