USD/JPY Pair Comes Under Some Selling Pressure, EUR/USD Holds Above 1.06 While GBP/USD Remains Below 1.20
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The US dollar declined against its major trading partners early Friday ahead of the release of service sector data for February from S&P Global. The US economic docket will feature the ISM Services PMI report on Friday. Recession fears could return if the headline PMI comes in below and the US Dollar could come under pressure ahead of the weekend.
The Fed appearance schedule is also full on Friday. Dallas Fed President Lorie Logan is scheduled to speak followed by Atlanta Fed President Raphael Bostic, Fed Governor Michelle Bowman and Richmond Fed President Tom Barkin. Logan and Bowman both vote on the Federal Open Market Committee in 2023.
USD/JPY
The yen pair traded in the range of 136.60-136.70 in the Asian session. In the European session there was a dip to close to 136.00, but USD/JPY rebounded and traded at 136.19
Following the previous day's sharp slide from a multi-week high, the US Dollar (USD) was back in demand amid a further rise in the US Treasury bond yields and turned out to be a key factor acting as a tailwind for the major.
The Japanese Yen (JPY), on the other hand, is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing.
The market focus now shifts to the upcoming BoJ monetary policy meeting, scheduled next week. In the meantime, the divergent Fed-BoJ outlook should continue to lend support to the USD/JPY pair.
EUR/USD
The last day of the trading week for the euro pair was up in the Asian session. Also in the European session, the EUR/USD pair was increasing with moments of decline. Currently, the pair is at the level of 1.0614
ECB Governing Council member Pierre Wunsch said early Friday that a terminal rate of 4% could not be excluded if core inflation in the eurozone remains persistently high. Meanwhile, Morgan Stanley said in its latest research note that they have updated the ECB terminal rate projection to 4% following "material revisions" to inflation forecasts.
GBP/USD
A pair of cable makes up for losses all Friday. GBP/USD started the day at around 1.1950 and is now trading above 1.1990
The pound rose on Friday, boosted by data that showed business activity rose at the fastest rate in eight months in February, bolstering investors' view that UK rates would continue to rise after March.
The final version of the S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) rose to 53.5 last month from 48.7 in January, the strongest rate of increase since June last year. Any reading above 50 means expansion.
AUD/USD
The Austalitic exchanged similarly to the pound today, but fell in the European session and is currently trading above 0.6750.
Source: investing.com, finance.yahoo.com
