In this article, we have covered the highlights of global market news about the USD/JPY, EUR/USD, USD/CNH and AUD/USD.
USD/JPY has risen to 151.00, a new 32-year high, as US bond rates rise.
On the last day of the week, the USD/JPY pair is extending its well-established bullish trend and acquiring significant follow-through momentum. In the middle of the European session, buying interest increased, pushing spot prices to a 32-year high in the neighborhood of 151.00.
Despite a significant difference in the monetary policy stances taken by the Bank of Japan and other significant central banks, the selling bias around the Japanese yen has not dissipated. This supports the rising USD/JPY pair and counteracts Japanese government intervention threats.
Conversely, the US dollar rose to a new weekly high and continues to be strongly supported by aggressive Fed predictions. Patrick Harker, president of the Philadelphia Federal Reserve, issued a warning on Thursday, saying that the US central bank is actively working to slow the economy to confront persistently rising inflation.
Meanwhile, the benchmark 10-year US government bond yield has reached its highest levels since the 2008 financial crisis due to growing expectations for a more aggressive tightening of policy by the Fed. This impacts the JPY as the US-Japan rate divergence further widens.
EUR/USD hovers at 0.9770, with the dollar remaining strong.
At the week’s close, the euro is under pressure, pushing the USD/EUR rate to the 0.9760 area.
With more buying activity around the dollar, the EUR/USD presently seems to stabilize in the bottom half of the most recent range in the 0.9770/60 area. Meanwhile, the uninterrupted rise in US yields seems to support the buck’s upward movement.
The 10-year bund rates surge to 2.50% for the first time since July 2011 on the German money market in a similar vein.
Later in the evening, the only release on the domestic schedule will be the sophisticated Consumer Confidence indicator monitored by the European Commission. Before the release of the Monthly Budget Statement, NY Fed J.Williams is scheduled to give a speech according to the US calendar.
Despite the dollar’s ongoing surge, the EUR/USD currently seems to be beginning to consolidate in the sub-0.9800 region.
USD/CNH: A breach of 7.3000 is still likely – UOB
According to Quek Ser Leang, a market strategist at UOB Group, and Lee Sue Ann, an economist there, further gains might result in USD/CNH shortly challenging the 7.3000 level.
24-hour perspective: “We did not anticipate the USD’s abrupt decline to 7.2210 and the subsequent quick recovery from the low. The bias for today is upward, even though the comeback has not yet acquired significant speed. But it’s doubtful that 7.2800 will be broken clearly (the next resistance is at 7.3000). Support may be found in 7.2440, then 7.2240.
Within three weeks, “We remain committed to yesterday’s position” (20 October, at 7.2650). As said, the upside risk is still there, and there is a considerable likelihood that the US Dollar will break beyond 7.3000. The USD’s strength that began one week ago would only be over if it broke below 7.2150 (a level that remains a “strong support” level from yesterday).
AUD/USD: UOB anticipates further sidelined trading.
According to UOB Group economist Lee Sue Ann and markets strategist Quek Ser Leang, the AUD/USD is projected to trade between 0.6190 and 0.6390 shortly.
View for the next 24 hours: “We said yesterday that the Australian dollar “might move lower but is not anticipated to breach the primary support around 0.6190. There is another support at 0.6220, we added. We did not anticipate such wild price swings as the AUD plummeted to 0.6229, rose to 0.6357, and then returned to settle at 0.6283 (+0.20%). The unpredictable movement has produced a mixed picture, and the projected range for the Australian dollar is between 0.6230 and 0.6330.
Within the next three weeks: “Our most recent analysis from Tuesday (18 October, spot at 0.6295) remains valid. AUD is anticipated to consolidate and trade between 0.6390 and 0.6190 for the time being, as was indicated.
Please click here for the Market News Updates from 20 October, 2022.