Today’s exchange 2024/07/13(Sat) 05:50
The dollar-yen continues to weaken; there is a chance that today was also intervened = New York exchange rate overview
In today’s NY exchange market, the dollar/yen continued its downtrend and fell to the 157 yen level. Although some items were bought back, the highest price was suppressed by a series of sales. On this day, the US Producer Price Index (PPI) was released and exceeded expectations. In the foreign exchange market, there was a reaction to dollar purchases at one time, but the upside was suppressed, and selling was now seen to intensify.
The Japanese Finance Ministry appears to have taken advantage of the lower-than-expected US consumer price index (CPI) to intervene in foreign exchange the day before, but looking at how the dollar-yen has been after falling, the same intervention could have been done today as well. Finance Minister Kanda, whose term ends at the end of this month, was reported to have said, “I will not comment on intervention or rate checks,” as he did the day before.
In response to the US Consumer Price Index (CPI) the day before, the market is raising expectations for the Federal Reserve to cut interest rates, and there is no change in that mood. The market has fully priced in the September interest rate cut, and in some cases there is the possibility that interest rates will be cut three times this year.
The medium-term support level for the dollar-yen is 156.50-158.35 yen, but it has now reached that level and it will be interesting to see if it moves towards the lower limit of 156.50 yen.
The euro dollar continued to chase higher prices and extended its rise to the $1.09 level. This is also the level at which price rejected the upside in early June, and if it can be broken through, the March high of $1.0980 and the psychological milestone of $1.10 will be in sight.
The ECB board meeting will be held on the 18th next week, and it looks like the rate will remain unchanged this time. However, the market expects the Governing Council meeting to mainly pave the way for further interest rate cuts in September. The ECB began cutting interest rates in June, stressing that further measures would depend on data. Some believe that market prices expecting quarterly interest rate cuts are reasonable, and that the terminal rate (the final destination) will be close to 2.50%.
The pound-dollar exchange rate appeared to be moving towards the $1.30 level. The price seems to have absorbed the selloff at the $1.29 level, where some resistance to the upside was noted, and also stopped. With May’s monthly GDP announced the day before exceeding expectations and members of the Bank of England expressing a rather hawkish view, the market is turning a yellow light on the expectations of the Bank of England to cut interest rates in August.
However, some believe that the Bank of England will forcefully cut interest rates in August, but it is also stated that if the Bank of England cuts interest rates in August the appreciation of the pound may be short-lived. That being said, next week’s UK inflation figures and retail sales figures will be closely watched. The Bank of England is focusing more on inflation than growth, and if the Consumer Price Index (CPI) shows that inflation is easing, it could very well cut interest rates in August. In that case, the BoE could cut interest rates by a total of 0.75 percentage points by the end of the year, and the pound said it would lose some of its luster in the coming months.
MINKABU PRESS Editorial Department Takumi Nozawa
Written by: MINKABU PRESS
This is an editorial department that writes articles on market information and financial products such as stocks and FX, mainly for the asset formation information media “Minkabu” and the investor information media “Kabutan.” We offer a wide range of news and columns useful for investing, as well as content for beginners.