With the U.S. rate hike in line with market expectations, is the U.S. dollar entering a correction phase?
17.03.2022
- UK: BOE Policy Rate and Statement Announcement
- U.S. Initial Unemployment Insurance Claims
U.S. currencies traded weakly the previous day, with the euro/dollar pair rising by about 100 pips from 1.094 to 1.105.Although the U.S. dollar is rising against the yen, it is trading weakly against other currencies, and the “safe-haven dollar buying” trend is beginning to fade. With geopolitical risks—such as the situation in Ukraine—still unresolved, the market appears to be accepting the status quo; therefore, we should remain vigilant for a potential correction in the U.S. dollar.
Among European currencies, the euro is surging, with the euro/yen pair rising approximately 189 pips from 129.50 to 131.46.From a technical perspective, the EUR/JPY pair continues to move within the bands along the 10-period moving average on the 4-hour chart. If this upward trend continues, it could reach this year’s high of around 133.15; we will be watching price movements closely as we head into U.S. trading hours.
Today’s schedule includes remarks by ECB President Lagarde at 18:30 European time, the Eurozone Consumer Price Index at 19:00, the Turkish Central Bank (TCMB) policy rate and statement at 20:00, the Bank of England (BOE) policy rate and statement at 21:00, and at 21:30 U.S. time, the CanadianHousing Price Index, U.S. Initial Jobless Claims, U.S. Housing Starts, and the U.S. Philadelphia Fed Business Outlook Index at 21:30 U.S. time; U.S. Industrial Production and U.S. Capacity Utilization at 22:15; and U.S. Weekly Natural Gas Inventories at 23:30.We will carefully assess whether the U.S. dollar will enter a correction phase heading into the weekend.
Author: Keisuke Sakurai
