Euro Holds Above $1.05, USD/JPY Pair Rose Above 136
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This week is one of the most macro-packed so far this year, with four major central banks holding their final policy meetings of the year, plus consumer inflation data from the United States that could be instrumental in determining the outlook for U.S. interest rates and the dollar.
The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank will all release rate decisions.
Overall, risk assets came under pressure on Monday despite further signs from China that it may be moving away from its very restrictive Covid-19 policy.
- Euro Holds Above $1.05 Ahead of Key Policy Meetings
- A package of positive readings from Great Britain appeared.
- Against the yen the dollar rose 0.2%
EUR/USD
EUR/USD has been rising since reaching a 20-year low of 0.9536 in October. The rate reached the level of 1.0595, but was unable to break the breakout point and the previous high at 1.0615 and 1.0638 respectively. It is currently trading around the 1.0560 level with an upside bias.
The euro is weaker today as the US dollar gains ahead of a crucial week of central bank meetings and data.
There are no key macro economic events for the EUR/USD pair today.
The European Central Bank is expected to deliver a dialed-down 50 bps rate hike on Thursday. Meanwhile, all eyes turn to CPI numbers from the US due on Tuesday
GBP/USD
The overall look of the cable market looks bearish. The GBP/USD pair is currently trading close to the level it closed last week at 1.2239. On the daily chart, we can see that the price of the cable has increased to this level. Trading on the daily chart shows the price around 1.2280.
The British pound was subdued in reaction to the breaking of British GDP this morning, however, after the start of the European session, the reaction may be more positive. Other reports were also positive with only Industrial Production (MoM) (Oct) dropping to 0.0%.
Source: investing.com
GBP/USD daily chart
AUD/USD
The Australian dolar was last down 0.4% at $0.6772. Today, the AUD/USD pair reached 0.6795 during the day and then started to fall. On the daily chart, we can see that the pair is trading at 0.6756.
USD/JPY
USD/JPY started the week with gains. The pair rose from 135.0740 – the last week close level - to 136.8440 - current trade. This means that the Japanese yen is negatively compared to the US dollar. In other words against the yen the dollar rose 0.2%
Today there were reports of the Japanese PPI, which was higher than expected. Year on year PPI reached 9.3% and PPI m/m 0.6% However, they did not support the yen.
The last statement of the representatives of the Bank of Japan still plays a role. Bank of Japan Governor Haruhiko Kuroda recently said it was too early to discuss the possibility of reviewing the central bank's monetary policy framework.
However, an analyst close to policy makers suggested that the BoJ may drop the 10-year bond yield cap as early as next year.
Source: investing.com, dailyfx.com, finance.yahoo.com
