Should We Pay Close Attention to Remarks by MPC Member Pill of the UK?
05.08.2022
- Canada/U.S. Employment Statistics
- Housing Prices in Halifax, UK
In U.S. currency markets 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, pushing the economy into 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 stagnant 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 the European session.
Today’s schedule includes German industrial production and UK Halifax house prices at 15:00 Asia time; French industrial production and the French manufacturing production index at 15:45; a speech by UK MPC member Pill at 20:15 Europe time; and remarks by U.S. Federal Reserve Governor Barkin at 21:00:Richmond Fed President, at 21:30 U.S. time: Canada/U.S. employment data, at 23:00: Canada’s Ivey Purchasing Managers’ Index, and at 28:00: U.S. consumer credit balances. We will monitor currency strength and weakness while paying close attention to the remarks by UK MPC member Pill.
Author: Keisuke Sakurai
