We should remain vigilant to see if currency strength shifts as U.S. trading hours begin.
12.07.2022
- U.S. NFIB Small Business Optimism Index
- U.S. – Barkin: Remarks by the President of the Richmond Federal Reserve Bank
In yesterday’s U.S. currency markets, the Dollar Index rose to 108, making the dollar the dominant force. The USD/JPY pair hit a new high for the year, touching 137.752.During today’s Asian trading session, we are seeing price movements that suggest a continued upward trend. While it remains to be seen whether this rally will persist, we should keep in mind that buying driven by market expectations is likely to continue until tomorrow’s CPI release, as the results could influence the magnitude of interest rate hikes at the next FOMC meeting.
European currencies are under pressure against the U.S. dollar, with the euro falling to 1.0004, just shy of parity. Europe is facing soaring resource prices and energy supply issues stemming from the prolonged Russian invasion of Ukraine, and the euro is expected to remain weak against the U.S. dollar unless geopolitical risks subside.
Today’s schedule includes remarks by Bank of England Deputy Governor Kanliff at 17:00 CET, the German ZEW Economic Sentiment Survey at 18:00, remarks by German Bundesbank President Nagel at 18:30, and the U.S. NFIB Small Business Optimism Index at 19:00. During U.S. trading hours, at 25:30, U.S. Federal Reserve Governor Barkin is scheduled to speak:, remarks by Richmond Fed President Barkin at 01:30 a.m. ET, remarks by Bank of England Governor Bailey at 02:00 a.m. ET, and a U.S. 10-year Treasury auction. We will carefully assess whether currency strength shifts as we move into U.S. trading hours.
Author: Keisuke Sakurai
