All eyes are on whether the U.S. dollar will maintain its strength ahead of the FOMC meeting early next month

All eyes are on whether the U.S. dollar will maintain its strength ahead of the FOMC meeting early next month

17.10.2022

Last weekend, the U.S. dollar emerged as the strongest currency during U.S. trading hours after the University of Michigan’s October Consumer Sentiment Index came in at 59.8, beating market expectations of 58.9. The USD/JPY pair rose by just under 2 yen, from 146.839 to 148.859, closing at a level not seen in 32 years.During today’s Asian trading session, USD/JPY is attempting to rise, with the downside appearing heavy. The pair is currently trading around 148.610, supported by the 10-period moving average on the hourly chart. We will need to carefully assess whether an upward move will materialize as U.S. trading hours approach.

European currencies saw the euro hold its ground against a rising U.S. dollar, with the EUR/USD pair trading in a range of 100 pips between 0.9707 and 0.9808.There has been no significant price movement during Asian trading hours at the start of the week, with the pair trading within a 15-pip range. Since the EUR/USD pair has been stuck at the 61.8% Fibonacci retracement level following its rise two weeks ago, we will be watching closely to see if this range-bound market continues for a while.

Today, at 3:00 PM Asia time, Norway’s trade balance will be released, followed by Turkey’s fiscal balance at 5:00 PM Europe time,the Brazilian IBC-BR Economic Activity Index at 21:00 US time, the Philippine Consumer Price Index at 21:00, the US NY Fed Manufacturing Index at 21:30, US 3-month and 6-month Treasury auctions at 24:30, remarks by German Bundesbank President Nagel at 28:00, and remarks by Canadian Senior Deputy Governor Rogers at 29:00.We will be closely monitoring whether the US dollar maintains its strength heading into the FOMC meeting early next month, following the release of last weekend’s US CPI data.