With European currencies holding firm against the yen—in contrast to U.S. currencies—they may be worth watching

With European currencies holding firm against the yen—in contrast to U.S. currencies—they may be worth watching

22.05.2023

Last weekend, U.S. currency markets were influenced by Federal Reserve Chair Powell’s remarks that “while we have been tightening policy for some time, we are facing uncertainty regarding the extent of credit tightening caused by stress in the banking sector.”Expectations for an interest rate hike at the FOMC meeting next month in June have receded, causing the U.S. dollar to fall against the euro. The EUR/USD pair rose from 1.0760 to 1.0828, returning just below the 20-period moving average on the 4-hour chart. However, on the daily chart, the RSI has yet to reach 30 and still has room to fall, so it will be worth watching to see if the U.S. dollar recovers during U.S. trading hours.

Among European currencies, the Swiss franc rose slightly against the yen ahead of today’s industrial production release. The CHF/JPY pair rose from 152.851 to 153.765. The price has since stabilized and is currently trading around 153.300.As CHF/JPY has risen to levels approaching this year’s high of 153.961, set earlier this month, attention is focused on whether the Swiss franc will continue to strengthen against the yen.

Today’s schedule includes Swiss industrial production at 3:30 PM, the Turkish consumer confidence index at 4:00 PM, Taiwan’s unemployment rate at 5:00 PM, Hong Kong’s consumer price index at 5:30 PM, Eurozone construction output at 6:00 PM, and U.S. Federal Reserve Governor Brainard at 9:30 PM:St. Louis Fed President’s remarks, 11:00 PM: Eurozone Consumer Confidence Index, 12:05 AM: U.S. Bostic: Atlanta Fed President’s remarks, U.S. Barkin: Richmond Fed President’s remarks, and U.S. Daly: San Francisco Fed President’s remarks. We will carefully monitor the upside potential for European currencies, which are holding firm against the yen in contrast to the U.S. dollar.