Markets are watching the pound’s direction after the UK CPI came in at 6.7%, unchanged from the previous month

Markets are watching the pound's direction as UK CPI came in at 6.7%, unchanged from the previous month

19.10.2023

In yesterday’s U.S. currency trading, the U.S. dollar rose slightly against the yen despite the fact that U.S. housing starts for September, released yesterday, fell to 1.473 million from 1.543 million the previous month. The USD/JPY pair rose slightly from 149.486 to 149.934, finding support at the 20-period moving average on the 4-hour chart.Technically, the USD/JPY pair’s daily RSI is trending upward and has broken above the -3σ line, so we should keep an eye on the dollar’s price action during U.S. trading hours.

European currencies saw the British pound fall against the yen immediately after the release of the UK’s September Consumer Price Index yesterday, which remained unchanged from the previous month at 6.7% year-on-year. The GBP/JPY pair fell from 182.800 to 181.658, tracking the -2σ line on the hourly RSI. We will need to monitor currency strength later today to see if the pound continues to weaken against the yen.

Today, at 3:45 PM, French business sentiment; at 5:00 PM, the Eurozone current account balance; at 5:30 PM, Hong Kong employment statistics; at 9:30 PM, U.S. initial jobless claims, Canadian industrial producer prices, and the U.S. Philadelphia Fed Business Outlook Index;at 10:00 PM, remarks by Fed Governor Jefferson; at 11:00 PM, U.S. existing home sales and the U.S. Leading Economic Index; at 1:00 AM, remarks by Fed Chair Powell; at 2:00 AM, the U.S. 5-year Treasury auction; and at 2:30 AM, remarks by Fed Vice Chair Barr.We will carefully assess the direction of the pound, as UK CPI came in at 6.7%, unchanged from the previous month.