We should be on the lookout to see if currency strength and weakness will shift as U.S. trading hours begin.
12.07.2022
- U.S. NFIB Small Business Optimism Index
- U.S. - Birkin: Remarks by the President of the Richmond Federal Reserve Bank
In the U.S. currency market yesterday, 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, price action suggesting an upward move has been observed. While it remains to be seen whether this upward trend will continue, it is important to keep in mind that buying driven by market expectations is likely to persist until tomorrow’s CPI release, as tomorrow’s U.S. Consumer Price Index results could lead to adjustments in the magnitude of interest rate hikes at the next FOMC meeting.
European currencies are under pressure against the U.S. dollar, with the euro/dollar exchange rate falling to 1.0004, close to 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 Kanrif at 17:00 European time, the German ZEW Economic Sentiment Survey at 18:00, remarks by German Bundesbank President Nagel at 18:30, the U.S.NFIB Small Business Optimism Index, followed by remarks by U.S. Federal Reserve Bank of Richmond President Barkin at 25:30 U.S. time, remarks by Bank of England Governor Bailey at 26:00, and a U.S. 10-year Treasury auction. We will carefully assess whether currency strength and weakness will shift as we move into U.S. trading hours.
