In this article, we have covered the highlights of global market news about the USD/JPY, NZD/USD, GBP/USD and EUR/USD.
USD/JPY: A drop below 137.00 would seem unfavorable – UOB
While a steeper decline to the 137.00 level appears unfavorable in the near term, USD/JPY is still under pressure for the time being, according to UOB Group economists Lee Sue Ann and Quek Ser Leang.
24-hour perspective: “Yesterday, US Dollar fell steeply but only for a moment, to 137.48, before exploding higher. With the comeback, downward pressure has subsided, and the US Dollar has entered a consolidation period. In other words, the USD will probably move sideways today and is predicted to trade between 138.20 and 139.30.
Next 1-3 weeks: “In our most recent narrative, published last Thursday (November 24, with the spot price at 139.20), we maintained the position that the risk for the US Dollar has changed to the downside, approaching 137.70. The USD fell to 137.48 yesterday (November 28) before rising. Even while more USD decline is not ruled out, the likelihood of the USD falling to the next support around 137.00 is low due to declining negative momentum and oversold circumstances. Overall, the only way to know that the US Dollar is not losing further ground is if it breaks over the “strong resistance” level of 139.60.
NZD/USD: Positive impetus wanes – UOB
According to UOB Group economist Lee Sue Ann and market strategist Quek Ser Leang, NZD/USD is expected to trade between 0.6100 and 0.6240 during the following weeks.
24-hour view: “The steep decline in the New Zealand dollar to a low of 0.6156 seems exaggerated. However, NZD may go below 0.6140 since there is no indication of stabilisation. It seems doubtful that the primary support at 0.6100 will be compromised. The NZD is unlikely to decline much more if 0.6210 (a minor resistance level at 0.6190) is broken on the upside.
The NZD failed to hold onto its gains after hitting a high of 0.6289 last Thursday (November 24), and it also drastically declined by 1.38% yesterday (NY close of 0.6161). NZD is anticipated to stabilise and trade between 0.6100 and 0.6240 for the time being as upward momentum has stalled.
GBP/USD: Room for additional decline until year’s end, according to ING
Late on Monday, the GBP/USD exchange rate fell under 1.1950 before turning around early on Tuesday. ING economists predict that the pound will continue to be unstable until the end of the year.
The testimony of Bank of England Governor Andre Bailey is highlighted. “A big change in Bailey’s policy language two weeks before the BoE meeting seems improbable, but the close closeness to the meeting also implies that markets often overread MPC members’ remarks. In our judgement, a 50 bps hike is more plausible than a 57 bps increase, which markets are presently pricing.
“Cable has retreated below 1.2000 as the Dollar gained a little ground, and we see opportunity for additional decline through the end of the year as the greenback finds more support and the Pound suffers from a gloomy UK economic outlook,” said the author.
EUR/USD: Commerzbank predicts that the Euro will decline due to easing Eurozone inflation figures.
The ECB’s hawkish remarks continue to draw attention. According to Commerzbank analysts, however, the Eurozone’s November inflation data may influence rate dreams about lowering inflation.
It is anticipated that eurozone inflation decreased marginally in November.
“Speculation regarding a 75 bps move has increased due to recent hawkish ECB statements. If the inflation numbers surprise on the upside today, tomorrow, and especially, speculation is likely to grow.
“A surprise on the upside on the inflation front may eventually drive the pair beyond this threshold,” said a trader after the EUR/USD made another effort to reach 1.05 yesterday but ultimately failed.
We anticipate that Eurozone inflation will have marginally decreased in November, along with the majority of experts surveyed by Bloomberg. If today’s German data were to support that, rate fancies on the market and the Euro might be dampened. However, negative pressure on the Euro will probably be restricted because of the ECB’s hawkish remarks and the still-high inflation rate.
Please click here for the Market News Updates from 28 November, 2022.