USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound
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The dollar fell on Monday but stayed close to Friday's six-week high as a recent wave of positive economic data boosted market expectations for a tightening of the Federal Reserve's monetary policy.
USD/JPY
The USD/JPY pair started trading at 134.32 and then rose rapidly towards 134.50. The momentum was not extended and the yen fell to 134.00. At the time of writing, USD/JPY is trading slightly above 134.00 at 134.0290.
The geopolitical risk intensified over the weekend when North Korea fired ballistic missiles into eastern waters overnight after an intercontinental ballistic missile was launched on Saturday. Saturday's launch landed off Japan's west coast and prompted joint exercises between the US and South Korea as well as the US and Japan.
The sister of North Korean leader Kim Jong Un said the use of the Pacific as a "training ground" would depend on the behavior of US forces and warned of the growing presence of US military assets in the region.
This comes as rumors swirl of a new Russian offensive in Ukraine and ongoing US-China spy balloon issues.
Markets are still awaiting guidance from the new leadership of the Bank of Japan (BoJ), but hopes for a move away from ultra-easy monetary policy may be overly optimistic.
EUR/USD
European Central Bank (ECB) policymaker Francois Villeroy de Galhau reiterated that inflation in the eurozone is "too fast and probably persistent", while arguing that the ECB needs to be more predictable in its communications and provide a short-term policy outlook.
Later in the day the European Commission will release flash consumer confidence index for February, which is expected to slightly improve to -19.0 from -20.9 in January. Poor trading conditions, however, will likely see the pair's shares confined to a narrow channel.
The EUR/USD pair started the week at 1.0686 but was falling. After the fall, the EUR/USD pair rose towards 1.07, but failed to maintain momentum and the pair is again around 1.0680.
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GBP/USD
After last week's hesitant action, GBP/USD managed to rebound around the mid-1.2000 area early Monday. The cable pair has been falling from above 1.2050 and is currently trading at 1.2025.
Sterling could fall if the Bank of England raises interest rates by 25 basis points in March, but signals that this will be the last hike. Some worrisome economic data from the UK dampened additional rate hikes after March, and money markets now appear to favor a break from the May meeting.
The widening of the US-UK rate differential has recently weakened sterling, which could get even worse if the BOE formally deems a potential March interest rate hike to be its last, and given the US data still favors a tightening of the rate path interest rates for the Federal Reserve.
AUD/USD
The AUD/USD pair is based on Friday's good rebound from around 0.6800, the lowest level since January 6, and gaining strong traction on the first day of the new week.
The Australian pair was growing towards 0.69. AUD/USD managed to drink through 0.69 and trade above that level. This momentum was interrupted and the pair dropped to 0.6901.
Source: investing.com, finance.yahoo.com
