In this article, we have covered the highlights of global market news about the AUD/USD, USD/JPY, GBP/USD and USD/TRY.
AUD/USD faces more losses if it falls below 0.6570 – UOB
The 0.6530 level may be tested again if the 0.6570 barriers is passed, according to UOB Group economist Lee Sue Ann and market strategist Quek Ser Leang.
24-hour view: “Yesterday, we maintained that the Australian dollar “may decline to 0.6570 before a comeback is expected.” Our hopes were dashed when the Australian dollar fluctuated quietly between 0.6601 and 0.6650. The price movements look to be stabilizing, and today’s range for the Australian dollar is anticipated to be between 0.6615 and 0.6675.
Next 1-3 weeks: “We maintain the same position as yesterday (22 Nov, spot at 0.6605), according to which the AUD is experiencing little downward pressure. But before a drop to 0.6530 is probable, AUD must breach and hold below 0.6570. On the plus side, a break of 0.6690 (a level that has remained a “strong resistance” level) would show that the slight downward pressure now present has subsided.
USD/JPY below mid-141.00s amid USD weakening, FOMC minutes in focus
The USD/JPY pair recovers from an intraday decline to levels below 141.00 and increases by more than 50 pips from the daily low. However, given the pervasive selling bias around the US Dollar, spot prices find it difficult to take advantage of the movement and meet with new supply close to the 141.50 level.
Investors are currently persuaded that the US central bank would moderate the pace of its policy tightening despite the recent hawkish remarks made by several Fed members. The market’s current pricing suggests a higher likelihood of a very modest 50 basis point rate increase at the FOMC’s next policy meeting in December. This has, in turn, been a significant driver of the recent dramatic decline in US Treasury bond rates and continues to weigh on the dollar.
But the Fed is still far from stopping its cycle of rate hikes, and it is anticipated to keep boosting borrowing prices to fight inflation. This should restrict the decline in US bond rates and support the dollar. The November FOMC meeting minutes, which are scheduled to be released later during the US session, will thus continue to be the market’s primary focus. The fluctuations of the USD price in the short term will be influenced by investors’ searches for hints regarding potential rate rises.
The safe-haven Japanese Yen may be challenged in the interim by a more dovish tone taken by the Bank of Japan (BoJ), combined with indications of stability in the equities markets, which may strengthen the USD/JPY pair. The BoJ has yet to show a desire to raise interest rates. Additionally, BoJ Governor Haruhiko Kuroda reaffirmed last week that the central bank would continue its monetary easing to help the economy and steadily achieve its 2% inflation objective.
GBP/USD: UOB expects further range-bound trading.
According to Markets Strategist Quek Ser Leang and Economist Lee Sue Ann of UOB Group, GBP/USD will likely trade in the 1.1680–1.1940 band over the next several weeks.
View for the next 24 hours: “We noted yesterday that the GBP “might revisit the 1.1780 level before a more durable bounce is probable.” GBP did not, however, touch 1.1780 as it bounced back from 1.1815. (high has been 1.1905). Despite the recovery, the rising trend has remained the same. Despite this, the GBP might somewhat increase, but additional growth is unlikely to overcome the significant barrier of around 1.1940. A breach of 1.1830 (a minor support level at 1.1860) would signal a decrease in the current slight upward pressure.
Within the next three weeks: “We don’t have anything to add to yesterday’s report” (22 Nov, spot at 1.1825). As said, the pound has entered a period of stabilization and will probably trade between 1.1680 and 1.1940 for the time being.
USD/TRY hovers at 18.60, with an emphasis on Fed Minutes.
During the second day of inactivity leading to Wednesday’s European session, USD/TRY oscillates between 18.60 and 65.
Before important US data and the minutes of the Federal Open Market Committee (FOMC) Meeting, the Turkish Lira (TRY) pair battles geopolitical and economic drivers.
According to Reuters, President Tayyip Erdogan said on Tuesday that Turkey would soon launch a military operation against extremists. After retaliatory attacks along the Syrian border intensified, the national was also cited in the press as indicating a potential ground offensive against a Kurdish group in Syria.
According to the most recent statistics flashing the day before, Turkish consumer confidence increased for the sixth consecutive month in November, reaching 76.6. Despite a persistent price increase, the mood indicator increased from a record low of 63.4 in June, according to Reuters. According to the news, “the overall economic condition expected over the next 12 months showed the highest gain in confidence, up 3.4% from a month earlier to stand at 80.5 points.”
Please click here for the Market News Updates from 22 November, 2022.