Should investors be wary of the euro's direction as it weakens against the pound?
22.11.2022
- Mester (U.S.): Remarks by the President of the Cleveland Federal Reserve Bank
- Turkey Consumer Confidence Index
In the previous day’s U.S. currency markets, the U.S. dollar strengthened and emerged as the strongest currency as the yield on the 10-year U.S. Treasury note rose to 3.82%.The EUR/USD pair fell by approximately 110 pips from 1.0333 to 1.0222. It broke below the 200-period simple moving average (SMA) on the hourly chart. Since the 200-period SMA is acting as resistance on the daily chart and the pair has entered a downtrend, we will be closely watching to see if tomorrow’s release of the FOMC minutes changes the market’s direction.
European currencies fell against the pound after Germany’s October Producer Price Index (PPI), released yesterday, plummeted to -4.2% from the market forecast of 0.7%.The euro-pound exchange rate fell slightly from 0.8697 to 0.8658. During today’s Asian trading session, the pair continues to test lower levels. Since the daily chart shows a significant break below the previous high, investors should remain cautious about a potential long-term decline in the euro.
Today’s economic indicators include the Turkish Consumer Confidence Index at 4:00 PM, remarks by RBA Governor Lowe of Australia, Canadian Retail Sales at 10:30 PM, the Richmond Fed Manufacturing Index at 12:00 AM, and remarks by Mester of the U.S. at 1:00 AM:Cleveland Fed President remarks, at 02:00 AM: Canada’s BOC Senior Deputy Governor Rogers remarks, at 03:00 AM: Germany’s Bundesbank President Nagel remarks, U.S. 7-year Treasury auction, at 04:15 AM: U.S. Kansas City Fed President George remarks, and at 04:45 AM: U.S. St. Louis Fed President Bullard remarks.We should remain cautious about the direction of the euro, which is currently weakening against the pound.
Author: Keisuke Sakurai
