With U.S. Interest Rates Rising, Caution Advised as the Euro Struggles to Gain Ground
09.02.2022
- U.S. 10-Year Treasury Auction
- U.S. Weekly Crude Oil Inventories
In the previous day’s trading, U.S. currencies were in a state of equilibrium with European currencies, though the U.S. dollar showed slight strength, causing the EUR/USD pair to fall by about 50 pips from 1.144 to 1.139.Since the EUR/USD pair appears to be finding support at the 20-period moving average (MA) on the 4-hour chart, the key focus will be whether it breaks below the 20-MA level at 1.140. Meanwhile, the U.S. dollar has weakened against the Australian dollar, and the AUD/USD pair rose slightly from 0.710 to 0.715.
Among European currencies, the euro is weakening against the pound, with the EUR/GBP pair falling from 0.854 to 0.841. Concerns that the conflict between Russia and western Ukraine over Ukraine will affect the entire European region are weighing on the euro’s upside.While other yen crosses have remained above their 20-period moving averages on the hourly chart, the euro/yen pair has already broken below its 20-period moving average.
Today’s schedule includes Germany’s trade balance at 16:00, the U.S. MBA Mortgage Applications Index at 21:00, remarks by MPC member Pill of the Bank of England at 22:10, U.S. wholesale inventories at 24:00,at 24:30, U.S. weekly crude oil inventories and remarks by Fed Governor Bowman; at 26:00, remarks by BOC Governor McClem and remarks by Cleveland Fed President Mester; and at 27:00, the results of the U.S. 10-year Treasury auction are scheduled to be announced.With U.S. interest rates on the rise, we will be closely monitoring how European currencies are affected.
Author: Keisuke Sakurai
