In this article, we have covered the highlights of global market news about the GBP/USD, USD/JPY, AUD/USD and EUR/USD.

GBP/USD may easily go back to 1.07/08 under significant volatility – ING

Realized GBP/USD volatility is at 34% after one week. Thus, according to ING experts, the GBP/USD might decline to the 1.07/08 range later in the day.

The standard for cable currently is 400 pip ranges. “Today’s main event is a meeting between the PM and the Chancellor and the Office for Budget Responsibility (OBR) to go through expenditure strategies. Even while the markets will appreciate the OBR’s engagement, the government still has to find a method to balance the books and avoid receiving a very poor rating from the rating agencies (two of which will provide UK sovereign rating outlooks on October 21).

“This weekend’s Conservative party conference implies it is much too early for a change in fiscal policy, and paired with a very challenging foreign environment, sterling should remain fragile.”

USD/JPY is trapped in a range around mid-144.00s, unable to find a clear direction.

The USD/JPY pair continues its upward price trend on Friday and trades inside a trading range that has been in place for four days as of the start of the European session. The pair is now trading close below the middle of the 144.00s range, down less than 0.10% on the day, and is being impacted by a number of opposing influences.

A further decline in US Treasury bond rates, which also works as a headwind for the USD/JPY pair, causes the US dollar to give up its tiny intraday gains and linger close to the weekly low. Following the Bank of England’s involvement for the second day on Thursday, the UK debt market seems to have steadied. The spillover effect weakens the US dollar and pushes the benchmark 10-year US Treasury note below a recent 12-year high.

On the other side, the Japanese yen receives support from mostly positive economic announcements. In reality, according to official figures, industrial production increased 2.7% in August over the previous month, exceeding expectations. According to a different analysis, retail sales in Japan increased during the reporting month more than was predicted. Additionally, Japan’s unemployment rate decreased slightly from 2.6% to 2.5%, which was in line with predictions and supported the local currency.

However, a little improvement in risk sentiment, as shown in a rebound in US equities futures, works against the safe-haven JPY. This enhances possibilities for the creation of new buying surrounding the USD/JPY pair, combined with a significant difference in the monetary policy stance taken by the Federal Reserve and other major central banks, notably the Bank of Japan (dovish). Consequently, any decline might be seen as a purchasing opportunity.

AUD/USD: The urge to fall seems to have abated – UOB

According to Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group, the likelihood of a further correction in the AUD/USD looks to be receding.

24-hour view: “We anticipated that yesterday, the AUD will ‘trade between 0.6420 and 0.6540. The AUD then traded in a tighter range (0.6436/0.6524) than anticipated. We anticipate that AUD will trade in a band of 0.6440/0.6540 for today since the price actions still seem to be part of a consolidation.

Within the next three weeks: “Our assessment from yesterday (29 Sep, spot at 0.6490) remains valid. As was said, the negative momentum is starting to slow down, and this, together with the robust recovery from the low of 0.6364, shows that the AUD’s weakness may soon normalize. Overall, only a break of 0.6555 (a level that has been a “strong resistance” since yesterday) would suggest that the Australian dollar is unlikely to decline further.

EUR/USD is expected to go below 0.95 later this year, according to ING.

Over the last few hours, EUR/USD has risen. However, ING analysts predict that the pair will run into persistent resistance in the 0.9850/70 region and fall down towards 0.95.

“Recent pricing of the EUR/USD has not been significantly impacted by differences in short-term interest rates.”

“0.9850/0.9870 may serve as intraday resistance for the EUR/USD, but strong volatility and less liquidity suggest that we’re in a noisier era for FX,” says the author.

In the end, however, we believe there is still pressure for the EUR/USD to drop below 0.95 in the coming months.

Please click here for the Market News Updates from 29 September, 2022.