Should we pay close attention to the remarks made by MPC member Pill?
05.08.2022
- Canada/Japan Employment Statistics
- Housing Prices in Halifax, UK
In the U.S. currency market the previous day, the Dollar Index fell to 105.8, while the euro rose against the dollar from 1.0154 to 1.0253.The U.S. June trade balance, released yesterday, came in at $79.6 billion, marking the third consecutive month of a narrowing deficit. However, the Bank of England’s forecast that the CPI would reach the 13% range in the October-December quarter and that the economy would enter a recession was met with negative sentiment in the U.S. as well, leading to selling of the U.S. dollar.
Among European currencies, the pound—which yesterday raised its policy rate to 1.75% for the sixth consecutive meeting—plummeted immediately after the rate announcement. The decline against the yen was particularly sharp, with GBP/JPY falling by approximately 2.8 yen from 163.953 to 161.110.Even during today’s Asian trading session, the pound has been unable to rebound and remains stuck near its lows. Since the daily RSI for GBP/JPY has been in a downtrend since April 19, traders should be wary of a potential decline into European trading hours.
Today, at 3:00 p.m. Asia time, German industrial production and UK Halifax house prices will be released, followed by FrenchIndustrial Production, and France’s Manufacturing Production Index; during European trading hours at 20:15, remarks by UK MPC member Pill; at 21:00, remarks by US Richmond Fed President Barkin; during US trading hours at 21:30, Canada/US Employment Statistics; at 23:00, Canada’s Ivey PMI; and at 28:00, US Consumer Credit.We will monitor currency strength and weakness while paying close attention to the remarks by UK MPC member Pill.
Author: Keisuke Sakurai
