Forex Weekly Summary: EUR/USD Ended The Week Below 1.06 And GBP/USD Below 1.20, USD/JPY Ended The Week Higher Above 136.00
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The dollar climbed to seven-week peaks on Friday, after data showed U.S. inflation accelerated while consumer spending rebounded last month, reinforcing expectations that the Federal Reserve may need to hike interest rates a few more times this year to curb the surge in prices.
On Friday, the core PCE index in the US amounted to 4.7% y/y at the end of January against expected 4.3% and 4.6% earlier.
USD/JPY
USD/JPY started the week at 134.1140. The weekly trend of the yen pair was up as the dollar was supported by strong data from the US economy and no support came from Japan. By Wednesday, USD/JPY was trading around 134.75. The first break above 135.00 was on Thursday but the momentum did not hold, USD/JPY rose again on Friday and passed 136.00 and recorded the highest trading level of the week at 136.4960. USD/JPY closed the week at 136.4060
The Japanese yen weakened past 135 per USD, dropping to its lowest level in over two months after incoming BoJ Governor Ueda stated the central bank must maintain its ultra-low policy stance for the time being.
The official also discarded immediate changes to the bank’s yield curve control, supporting bond prices worldwide. The dovish policy is set to stay despite the steady increase in Japanese consumer prices. Headline inflation jumped to 4.3 percent in February
EUR/USD
It was a difficult week for the EUR/USD pair. The euro pair managed to fall below 1.05 this week.
The euro pair started the week at 1.0683 and then fell. Weekly high above 1.07 (1.0705). The trend was down and the lowest level was reached by the EUR/USD pair at 1.0540. The week will close at 1.0547.
S&P Global's Composite Purchasing Managers Index for the currency bloc hit a seven-month high of 50.3 in January. That was above both December's 49.3 and the flash reading of 50.2. For the first time in seven months, the number was above the key figure of 50 that separates expansion from recession.
The data came after better official Eurostat data from the beginning of the week. They showed that the eurozone economy grew by 0.1% in the last quarter of 2022, beating expectations for a decline of 0.1%.
GBP/USD
For the cable pair, the week was mixed. GBP/USD started trading for the week at 1.2043, closing the week was much lower at 1.1942. The best day for the cable pair was Tuesday as the pair received support from the UK economy (positive PMI readings) and GBP/USD traded above 1.21, which was the week's high (1.2141). Trading lows occurred at the end of the week, with the all-time low at 1.1935.
The British pound fell below $1.20, hovering around its lowest level since January 5, as data pointing to a still-tight US labor market and sticky US inflation fueled expectations that the Federal Reserve would keep interest rates higher for longer.
At the same time, the Bank of England will raise the interest rate by another 25 basis points to 4.25% next month to combat double-digit inflation before the end of the current tightening cycle.
AUD/USD
The Aussie pair started trading at the 0.6869 level and on the first day rose above the 0.69 level. Above 0.69, the AUD/USD pair reached a weekly high of 0.6922. The Australian couple did not enjoy an increase for long and in the following days it decreased. Similar to European counterparts, AUD/USD reached its lowest level on Friday. The weekly low was at 0.6721. The Aussie Pair ended the week trading at 0.6727.
Source: finance.yahoo.com
