Investors should watch for shifts in currency strength based on Fed Chair Powell’s remarks
25.08.2023
- Germany's Second-Quarter GDP
- University of Michigan Consumer Sentiment Index
In U.S. trading yesterday, the U.S. dollar emerged as the strongest currency as initial jobless claims fell to 230,000 from 239,000 the previous week, coming in below the market forecast of 241,000.The euro fell against the dollar from 1.0876 to 1.0814. However, on the daily chart, the pair is hovering just below the 200-day moving average (SMA), which could provide support, so we will be watching for comments from key officials during U.S. trading hours.
In contrast to the FTSE, which was among the strongest performers in European equities, the pound fell against the yen. The GBP/JPY pair edged down slightly from 184.771 to 183.965, with the market lacking clear direction. Notably, price movements diverged among the yen crosses yesterday; while the USD/EUR pair rose, the GBP/JPY pair fell. Therefore, we should remain cautious regarding the pound’s price movements during European trading hours.
Today, at 3:00 PM, Germany’s Q2 GDP will be released; at 4:00 PM, Turkey’s capacity utilization rate; at 5:00 PM, Germany’s IFO Business Climate Index; at 9:00 PM, Brazil’s Consumer Price Index and Mexico’s Q2 GDP; at 11:00 PM, the U.S. University of Michigan Consumer Sentiment Index and Mexico’s current account balance;at 11:05 PM, remarks by Fed Chair Powell; at 12:00 AM, Canada’s fiscal balance; and remarks by Harker, President of the Philadelphia Fed. We must remain highly vigilant for shifts in currency strength or weakness depending on the content of Fed Chair Powell’s remarks.
Author: Keisuke Sakurai
