Market participants are likely keeping a close eye on the Japanese yen, which is showing relative strength amid the weakness of Western currencies.

Market participants are likely keeping a close eye on the Japanese yen, which is showing relative strength amid the weakness of Western currencies.

29.07.2022

In the U.S. currency market yesterday, the dollar index fell sharply to 105.8, causing the U.S. dollar to weaken. The dollar fell against both the yen and the Swiss franc. The USD/CHF pair dropped by approximately 90 pips, from 0.9630 to 0.9541. During today’s Asian trading session, the USD/CHF pair has continued to decline, currently trading around 0.9509 and hitting a new low for the month.

European currencies weakened as inflation concerns weighed on the euro, partly due to Germany’s July Consumer Price Index (CPI), released yesterday, which rose to 7.5% year-over-year.The EUR/USD pair fell by approximately 110 pips from 1.0235 to 1.0113. The market is currently range-bound, with the upside capped by the daily 20-day moving average (MA). However, since the daily RSI is trending upward, we will be watching closely to see if the pair breaks above the daily 20-day MA and continues to rise.

Today’s schedule includes Germany’s Import Price Index at 15:00 (Asia time), Switzerland’s Retail Sales at 15:30, and France’s Consumer Price Index at 15:45; followed by Switzerland’s KOF Leading Index and Turkey’s Trade Balance at 16:00 (Europe time), Germany’s Unemployment Rate at 16:55, Germany’s Q2 GDP (flash estimate) at 17:00,at 6:00 PM, the Eurozone Q2 GDP (flash estimate); and during U.S. trading hours, at 9:30 PM, Canadian GDP, U.S. personal income, and the U.S. core PCE deflator; at 10:45 PM, the U.S. Chicago PMI; and at 11:00 PM, the U.S. University of Michigan Consumer Sentiment Index.With European and U.S. currencies showing signs of weakness, it will be interesting to see if the relatively strong Japanese yen will prove its strength at the end of the month.