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4 Global Market Updates- 22 November, 2022

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

NZD/USD might go back below 0.60 by the end of the year, according to ING.

Tomorrow at 1:00 GMT, the Reserve Bank of New Zealand will announce its monetary policy. A 50 basis point or a 75 basis point boost is likely. In any event, ING experts predict that the effect on the Kiwi would be minimal.

Any NZD movements made after the meeting will be transient. In light of warnings against an excessively aggressive strategy from indicators of a quickening housing market collapse, 50 bps is more likely. However, most experts and the markets (66 basis points in price) favor a move of 75 basis points.

“The markets would probably see a half-point increase as dovish at this juncture, but a significant upward adjustment to rate estimates might lessen the effect on the New Zealand Dollar. In any case, anticipate that any NZD swings after the summit will be transient as soon as China news and global risk dynamics take back control of the market.

While we aim for a steady rebound to 0.64 throughout 2023, the NZD/USD is in danger of dropping down below 0.60 before the end of this year.

USD/JPY: According to Wells Fargo, the Yen will launch a significant medium-term resurgence.

The Japanese yen is expected to gain over the medium term, with Wells Fargo economists aiming for a USD/JPY exchange rate of 135 by Q1-202.

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Fed should halt rate hikes by the beginning of 2023. We estimate the USD/JPY exchange rate might reach 135.00 by Q1-2024, even though we expect the US dollar to remain strong until the beginning of 2023.

“We think the Yen will be more sensitive to changes in monetary policy rates and that changes in economic fundamentals will be a more important factor in determining currency movements than previous foreign exchange interventions. We anticipate significant possibilities for a stronger Yen when the Federal Reserve stops hiking rates in early 2023 because of this.

EUR/USD: Crédit Agricole believes the rebound may have peaked slightly below 1.05.

According to economists at Crédit Agricole CIB Research, the EUR/USD pair may have already reached its top last week, just short of the 1.05 mark.

It will be difficult to avert a recession. “The overall risk-on tone, which witnessed equities advances and a dramatic fall in energy prices on Friday, did nothing to help the EUR. On the data front, the flurry of Eurozone leading indicators for November released this week may gradually show that a recession would be challenging to avoid, which might reduce the attraction of the EUR, particularly as it will need a challenging reality check by the ECB.

The EUR/USD recovery may have already crested when it climbed just below 1.05 last week, according to actual rate spreads, which point to some downward consolidation as the year approaches.

GBP/USD eases from the day’s high, rising slightly at 1.1850 amid a slight USD decline.

The GBP/USD pair falters in its attempts to take advantage of its small intraday gains and falls a few pips from the daily high. The price dynamics of the US Dollar continue to control the pair’s movement, which is now hovering just around the mid-1.1800s and up about 0.20% for the day.

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The GBP/USD pair benefits from a tailwind as the USD Index, which gauges the dollar’s performance versus a basket of currencies, eases from a one-week high reached on Monday. In addition, the Sterling is supported by predictions that the Bank of England would keep hiking rates to confront persistently rising inflation. However, given the lack of real upside, it is prudent to exercise some care before making bold bullish wagers on the major.

The British Pound may continue to suffer due to the UK economy’s gloomy outlook, which would also limit advances for the GBP/USD pair. It is important to note that the UK Office for Budget Responsibility (OBR) has revised its projection for UK GDP growth from 1.8% in March to a 1.4% decline in 2019. Additionally, the deteriorating COVID-19 scenario in China and geopolitical worries could strengthen the dollar and help to keep the major under control, at least for the time being.

Please click here for the Market News Updates from 21 November, 2022.

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