Will the momentum of the euro-dollar pair, which has rebounded sharply, continue? This is something to watch closely.

Will the momentum of the euro-dollar pair, which has rebounded sharply, continue? This is something to watch closely.

18.01.2024

In the U.S. currency market yesterday, the U.S. dollar rose against the yen after the release of U.S. December retail sales data showed an improvement from 0.3% the previous month to 0.6%, with the core index also rising from 0.2% to 0.4%.The USD/JPY pair rose from 147.040, breaking above the key 148-yen level to reach 148.523. It climbed to a level matching last month’s high. However, given that the weekly chart shows three consecutive weeks of sharp yen weakness, investors should be wary of a potential corrective move.

European currencies saw the euro trade in a tight range against the U.S. dollar after the final figures for the Eurozone’s December Consumer Price Index, released yesterday, showed no change from the previous month’s 2.9% and a core year-over-year rate that also remained steady at 3.4%. The euro/dollar pair fell to 1.0846 before rebounding sharply.The rebound continued during today’s Asian trading session, pushing the pair up to 1.0903. Notably, the EUR/USD pair rebounded after touching its 75-day moving average on the daily chart. We will be closely monitoring whether the euro continues to recover ahead of next week’s ECB meeting.

Today’s schedule includes Australian employment figures at 9:30, New Zealand’s non-resident government bond holdings at 11:00, Japan’s industrial production at 13:30, Hong Kong’s employment figures at 17:30, the Eurozone’s current account balance at 18:00,EU construction output, and South African mining production at 9:30; remarks by SNB Governor Jordan at 7:30 p.m.; Brazil’s IBC-BR Economic Activity Index at 9:00 p.m.; remarks by Atlanta Fed President Bostic at 9:30 p.m.;Atlanta Fed President Bostic’s remarks; at 22:30, U.S. housing starts, initial jobless claims, and the Philadelphia Fed Business Outlook Index; at 25:00, U.S. weekly crude oil inventories; and at 27:00, a U.S. 10-year Treasury auction are scheduled.I’d like to carefully monitor the situation to see if the momentum behind the euro’s sharp recovery against the U.S. dollar will continue.