Keep an eye on the direction of European currencies, which are facing resistance
11.11.2021
- UK Unemployment Rate
- ECB Monthly Report
Yesterday, the three major U.S. stock indices all fell further, creating a risk-off market characterized by falling stock prices, rising interest rates, and lower oil prices. Following the release of strong U.S. economic data yesterday, concerns about inflation pushed the yield on the 10-year U.S. Treasury note up by about 6.3 percentage points to 1.56%. The VIX (fear index) rose by about 5.3 percentage points and is currently hovering around 18.7.
In the foreign exchange market, European currencies faced resistance despite the rising U.S. dollar, and the GBP/USD pair fell from 1.357 to 1.341. From a technical perspective, while the GBP/USD is approaching the 200-day EMA on the weekly chart, it is still some distance from the 200-day SMA, so we need to assess carefully whether the decline will continue.
Today’s schedule includes the release of UK unemployment figures, UK GDP, UK industrial production, UK manufacturing output, and the UK trade balance at 4:00 PM European time; the ECB’s monthly report at 6:00 PM; remarks by a member of the Bank of England’s Monetary Policy Committee (MPC) at 7:45 PM; and remarks by SNB Board Member Mecheler at 2:30 AM U.S. time.As we enter the latter half of the week and price volatility in the foreign exchange market has increased, we need to closely monitor how currency strength and weakness will evolve.
Author: Keisuke Sakurai
