Concerns Over Further Yen Weakness Following BOJ's Announcement of Fixed-Rate Operations
28.03.2022
- Remarks by Bank of England Governor Bailey
- Dallas Fed Manufacturing Activity Index
In the U.S. currency market last weekend, the U.S. dollar strengthened against the euro, with the EUR/USD pair peaking at 1.103 before falling approximately 80 pips to 1.095. The pair has broken below the 1.096 level, which had been viewed as a key support line, and with U.S. Treasury yields also on an upward trend, we should be wary of a further decline toward the next support level around 1.091.
Among European currencies, the pound rose significantly, with the GBP/JPY pair climbing from its recent low of 159.85 to 162.00. The pound’s rise was further spurred during today’s Asian trading session after the Bank of Japan announced “fixed-rate operations” involving unlimited purchases of 10-year government bonds with a yield cap of 0.25%. The pound is also rising against the euro.
Today’s schedule includes remarks by Bank of England Governor Bailey at 8:00 p.m. CET, followed by U.S. wholesale inventories (flash estimate) at 9:30 p.m. ET, the Dallas Fed Manufacturing Activity Index at 11:30 p.m. ET, a U.S. 2-year Treasury auction at 12:30 a.m. ET, and a U.S. 5-year Treasury auction at 2:00 a.m. ET.We will be closely monitoring the movements of various currency pairs to see if today’s price action sets the tone for the rest of the week.
Author: Keisuke Sakurai
