Will the Pound's Rise Continue?
27.07.2021
- U.S. 5-Year Treasury Auction
- U.S. Durable Goods Orders
In yesterday’s stock market, European stocks fell, with Germany’s DAX closing at 15,618, down 0.32% from the previous day. The German IFO Business Climate Index, released yesterday, fell to 100.8—its first decline in six months—and was met with negative sentiment as it came in below market expectations.Meanwhile, U.S. markets saw a slight rise in stock prices. U.S. new home sales for June, released yesterday, fell by about 6.6% from the previous month to an annualized rate of 676,000 units, falling short of market expectations. This appears to reflect a decline in demand for new homes due to the overall surge in housing prices.
In the foreign exchange market, the pound continues to show strength, and among the yen crosses, the GBP/JPY pair has seen the largest gain, rising 120 pips from 151.4 to 152.6.From a technical perspective, while the pair has pulled back at the 200-MA on the 4-hour chart, it has broken above the 20-MA on the daily chart; therefore, we need to carefully assess whether the upward trend will continue through this week.
Today’s schedule includes the UK CBI Retail Trade Survey at 19:00 European time, U.S. Durable Goods Orders at 21:30 U.S. time, and at 21:35 Australian time,remarks by RBA Deputy Governor Devel, at 22:00 the U.S. S&P/Case-Shiller Home Price Index, at 23:00 the U.S. Consumer Confidence Index and the U.S. Richmond Fed Manufacturing Index, and at 26:00 the U.S. 5-year Treasury auction.Ahead of tomorrow’s U.S. FOMC meeting, we will be closely monitoring the battle between European currencies and the U.S. dollar.
Author: Keisuke Sakurai
