Should investors be wary of the pound's volatile movements?
12.10.2022
- U.S. MBA Mortgage Applications Index
- Remarks by MPC Member Pill (UK)
In the previous day’s U.S. currency trading, the U.S. dollar remained firm as U.S. Treasury yields rose across the board. The USD/JPY exchange rate rose to 146.388, marking a 24-year high. However, at today’s press conference, Finance Minister Suzuki stated, “Sudden price fluctuations are undesirable. Intervention is not something we would undertake simply because the rate reaches this level.” His remarks confirmed that the government is more concerned about sharp fluctuations in volatility than about the level of the exchange rate itself.
Although Bank of England Governor Bailey had previously stated that the asset purchase program would end on the 14th of this week as originally planned, his announcement today that he would “extend the asset purchase program” caused the pound to fluctuate wildly. The pound-yen exchange rate fell by about 3 yen, from 162.637 to 159.718. Prices swung wildly as the market reacted to his contradictory remarks.
Today’s schedule includes UK GDP and UK industrial production at 3:00 PM, remarks by UK MPC member Haskell at 5:00 PM, Eurozone industrial production at 6:00 PM, the US MBA Mortgage Applications Index at 8:00 PM, remarks by UK MPC member Pill at 8:35 PM, the US Producer Price Index at 9:30 PM, and the EurozoneECB President Lagarde’s remarks, 11:00 PM: US Minneapolis Fed President Kashkari’s remarks, 2:00 AM: UK MPC Member Mann’s remarks, US 10-year Treasury auction, 2:45 AM: US Fed Vice Chair Barr’s remarks, and 3:00 AM: Release of the US FOMC minutes.We should remain vigilant regarding the pound, which is experiencing significant volatility.
Author: Keisuke Sakurai
