Should investors be wary of European currencies amid concerns over the spread of the Omicron variant?
10.12.2021
- University of Michigan Consumer Sentiment Index (Preliminary)
- UK GDP
Yesterday, two of the three major U.S. stock indices fell, and the market closed amid a risk-off sentiment characterized by falling stock prices, lower interest rates, and declining oil prices. Concerns spread that similar trends might emerge across Europe after the British government announced it would tighten restrictions in response to the spread of the Omicron variant of the novel coronavirus.
In the foreign exchange market, the euro, which had been rising, has fallen, and the EUR/JPY pair has completely erased the gains it made the day before yesterday, currently trading around 128.21. The EUR/JPY pair has pulled back as its upside is capped by the 20-day moving average on the daily chart, and since it has formed a double top on the weekly chart, we need to closely monitor whether the downtrend will continue.
Today, at 4:00 PM: UK GDP, UK industrial production, UK trade balance,German CPI and Turkey’s unemployment rate at 4:00 PM; remarks by ECB President Lagarde and Bundesbank President Weidmann at 6:05 PM; U.S. CPI and Canada’s Q3 capacity utilization at 10:30 PM; the preliminary U.S. University of Michigan Consumer Sentiment Index at midnight; and the U.S. budget balance at 4:00 AM.With stock prices falling, we will be closely monitoring how the currency markets perform over the weekend.
Author: Keisuke Sakurai
