USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$
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The US dollar hovered near the middle of recent ranges compared to majors on Thursday as investors scrutinized comments from many Federal Reserve officials. Overnight, four Fed speakers continue to send their hawkish message to the market. The consistent message is that further interest rate hikes are announced and that the interest rate will have to stay high for a long time.
The employment data initially raised expectations that the Fed might return to aggressive monetary policy, but Powell did not lean in that direction in his speech.
Investors will be keeping a close eye on the consumer price inflation data that comes out on Tuesday for additional guidance on the policy outlook.
USD/JPY
During the morning trading hours, USD/JPY held above 131.40 but failed to sustain momentum. USD/JPY has returned to levels below 131.00.
EUR/USD
EUR/USD maintained its upward momentum and extended its daily gain towards 1.0800 on Thursday.
Earlier in the day, data from Germany revealed that the Harmonized Index of Consumer Prices (HICP) fell to 9.2% on an annualized basis in January from 9.6% in December. This reading was much lower than market expectations of 10%, but the negative impact of these data on the euro remained short-lived.
With the major European stock indices opening much higher on Thursday, the EUR/USD rate began to rise. At the time of publication, the German DAX 30 and Euro Stoxx 50 indices were up over 1% during the day.
GBP/USD
The Bank of England is concerned that UK inflation will remain stubbornly high. This suggests that the BoE has growing uncertainty about whether further policy tightening is warranted and that the current cycle of rate hikes may be coming to an end.
The BoE has hiked interest rates 10 times since December 2021, the last being a week ago, as it battles to bring down sky-high inflation without causing a deep recession.
Bank of England Governor Andrew Bailey is joined today by MPC members Huw Pill, Professor Silvana Tenreyro and Professor Jonathan Haskel in the Treasury Committee (TSC). So far, they have been asked whether the central bank is lagging behind in the fight against inflation. So far, the statements of BoE representatives suggest that the MPC is still worried about persistently high inflation and that the British economy may face a prolonged period of weakness.
GBP/USD continued to move higher and hit a new six-day high above 1.2150 on Thursday. Cautious comments from BOE policymakers on the outlook for inflation and a risk-prone market environment help the pair keep their balance.
On Friday, the UK's Office for National Statistics will publish estimate GDP figures for December 2022.
AUD/USD
The risk-sensitive Australian dollar gained against gains from US equity futures and the more hawkish Reserve Bank. AUD/USD rebounded strongly from 0.6920 in the Asian session. The New Zealand dollar also appreciated.
Australians were rather dissatisfied after the last RBA meeting, which may point to further rate hikes in the future due to inflationary pressure. A slightly weaker dollar this morning is supporting the Australian bulls, including the rise of some key Australian commodities.
The Australian pair is currently trading close to the $0.7000 level.
Source: finance.yahoo.com, investing.com
