Should We Keep an Eye on the Pound's Direction?
21.12.2021
- Switzerland—Trade Balance
- UK CBI Retail Trade Survey
Yesterday, in the U.S. market, the three major stock indices all fell by more than 1% for the second consecutive day, resulting in a risk-off market characterized by falling stock prices, rising interest rates, and lower crude oil prices.The fear index (VIX) has risen above its benchmark of 20 to 22.8. Similar price movements were seen in Europe, where the spread of the Omicron variant is causing widespread concern. The announcement of a lockdown in the Netherlands also appears to have impacted stock prices.
In the foreign exchange market, the pound’s decline has been notable, and combined with the rise in U.S. 10-year Treasury yields, the GBP/USD exchange rate fell from 1.324 to 1.317.However, on the 4-hour chart, the pair has bounced off the 1.317 level multiple times, forming a lower wick, so we need to carefully assess whether a rebound is likely.
Today, at 16:00: Germany’s GfK Consumer Confidence Survey, Switzerland’s trade balance,Turkey’s Consumer Confidence Index, and the UK’s CBI Retail Trade Survey are scheduled for 4:00 PM; Canada’s Retail Sales and the U.S. Third-Quarter Current Account Balance are scheduled for 10:30 PM; the U.S. 20-Year Treasury Auction is scheduled for 3:00 AM; and New Zealand’s ANZ Consumer Confidence Index is scheduled for 6:00 AM the following day.We will closely monitor price movements while remaining vigilant for sudden price fluctuations caused by position adjustments ahead of Christmas.
Author: Keisuke Sakurai
