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Market News Foreign exchange trading reminder on June 7: Johnson successfully "breakthrough", the pound continues to rise, the Reserve Bank of Australia may raise interest rates for the first time in 12 years
Foreign exchange trading reminder on June 7: Johnson successfully "breakthrough", the pound continues to rise, the Reserve Bank of Australia may raise interest rates for the first time in 12 years
The U.S. dollar strengthened against a basket of major currencies on Monday, ahead of expectations that the U.S. Federal Reserve will raise interest rates by 50 basis points on June 15. The euro closed down 0.20% against the dollar at 1.0695, as the market expects the European Central Bank to raise interest rates this week, which is expected to boost the euro. British Prime Minister Boris Johnson wins a no-confidence vote, sterling extended gains. GMT+8 At 12:30 on June 7th, the Reserve Bank of Australia will issue an interest rate decision. The market predicts that the Reserve Bank of Australia will raise interest rates. The focus of the debate is on the rate of interest rate hikes.
2022-06-07
9434
The dollar strengthened against a basket of major currencies on Monday as risk appetite retreated from earlier levels and U.S. stocks were well below session highs, increasing their safe-haven appeal ahead of key inflation data later in the week.
The dollar fell back to near 102 after hitting a near 20-year high of 105.01 on May 13, though Friday's strong jobs report helped the greenback post its first weekly gain in three weeks.
The Fed is widely expected to announce a 50 basis point rate hike on June 15. Until then, investors will be watching Friday's consumer price index (CPI) for signs of how long the Fed may continue to raise interest rates.
Joe Manimbo, senior market analyst at Western Union Business Solutions, said: "Risk appetite set the market tone ahead of this week's big event, which does affect expectations for Fed policy for the rest of the year. The Fed is reducing inflation. The parties are serious, and it appears that aggressive rate hikes are still on the table until they see inflation moving materially closer to their target."
The U.S. dollar index rose more than 0.33% on Monday, reaching a peak of 102.47, and finally closed up 0.21% at 102.40.
The euro fell as much as 0.32% to a low of 1.0683 against the dollar on Monday, before paring losses to end down 0.20% at 1.0695. The European Central Bank's policy meeting later this week is expected to boost the euro.
Bank of America Securities said in a report on Monday that it expects the ECB to raise interest rates by 150 basis points this year, including 50 basis points in July and September, while Barclays took a more hawkish view on the ECB's rate hike path.
Sterling rose ahead of Monday's no-confidence vote against British Prime Minister Boris Johnson. Sterling maintained its gains after Johnson won a no-confidence vote. Sterling closed up 0.35% at 1.2528 on Monday, trading within a narrow range after entering early Asian trading on Tuesday.
Recently, Johnson has faced calls to step down due to the continuous fermentation of the "Party Gate" incident. British Conservative MPs voted for no confidence in the party leader, Prime Minister Boris Johnson on June 6. The vote showed that 211 of the 359 Conservative MPs backed Johnson; 148 wanted him to step down, missing the 180 votes needed to pass a motion of no confidence. Johnson will remain the leader of the Conservative Party and Prime Minister of the United Kingdom. Under current rules, Conservative MPs are not expected to hold another no-confidence vote for a year. Johnson expressed satisfaction with the voting results and hoped that everyone would start paying attention to other issues.
Bank of Japan Governor Haruhiko Kuroda said on Monday that the central bank's priority is to support the economy, stressing its unwavering commitment to maintaining "robust" monetary stimulus. USD/JPY closed up .81% at 131.88 on Monday. After entering the early Asian market on Tuesday, the yen maintained its downward trend, causing USD/JPY to continue to rise. It once refreshed a 20-year high to 132.29. The current exchange rate has fallen slightly and is trading around 132.25.
The Australian dollar closed 0.19% lower at 0.7192 on Monday. GMT+8 At 12:30 on June 7, the Reserve Bank of Australia will release its interest rate decision. Economists and traders forecast that the Reserve Bank of Australia is on track to raise interest rates for the first time in 12 years, which is expected to help the Australian dollar rebound. It is reported that the focus of market debate centered on the rate hike by the Reserve Bank of Australia.
1. The rise in U.S. bond yields supports the dollar against the yen if it is mainly supported by continued strong economic performance, Koji Fukaya of Market Risk Advisory in Tokyo wrote in a note.
2. Wells Fargo strategist Brendan McKenna said, therefore, the divergence between the dollar and the yen is unlikely to reverse in the short term. We expect the Fed to continue raising rates and the Bank of Japan to keep rates on hold for the foreseeable future, as long as this remains the case, the yen will continue to weaken
3. Bank of America currently expects the ECB to raise interest rates by 150 basis points this year and 50 basis points in July and September
4. Commonwealth Bank of Australia currency strategist Carol Kong said that the dollar against the yen may consolidate in the next few months and may move towards the upper end of the 126-131 range. While Japan's trade deficit could widen in the coming months and put upward pressure on USD/JPY, Japan's strong income surplus could provide some cushion. As long as Japan's current account remains in surplus, the yen can benefit from safe-haven funds.
The dollar fell back to near 102 after hitting a near 20-year high of 105.01 on May 13, though Friday's strong jobs report helped the greenback post its first weekly gain in three weeks.
The Fed is widely expected to announce a 50 basis point rate hike on June 15. Until then, investors will be watching Friday's consumer price index (CPI) for signs of how long the Fed may continue to raise interest rates.
Joe Manimbo, senior market analyst at Western Union Business Solutions, said: "Risk appetite set the market tone ahead of this week's big event, which does affect expectations for Fed policy for the rest of the year. The Fed is reducing inflation. The parties are serious, and it appears that aggressive rate hikes are still on the table until they see inflation moving materially closer to their target."
The U.S. dollar index rose more than 0.33% on Monday, reaching a peak of 102.47, and finally closed up 0.21% at 102.40.
The euro fell as much as 0.32% to a low of 1.0683 against the dollar on Monday, before paring losses to end down 0.20% at 1.0695. The European Central Bank's policy meeting later this week is expected to boost the euro.
Bank of America Securities said in a report on Monday that it expects the ECB to raise interest rates by 150 basis points this year, including 50 basis points in July and September, while Barclays took a more hawkish view on the ECB's rate hike path.
Sterling rose ahead of Monday's no-confidence vote against British Prime Minister Boris Johnson. Sterling maintained its gains after Johnson won a no-confidence vote. Sterling closed up 0.35% at 1.2528 on Monday, trading within a narrow range after entering early Asian trading on Tuesday.
Recently, Johnson has faced calls to step down due to the continuous fermentation of the "Party Gate" incident. British Conservative MPs voted for no confidence in the party leader, Prime Minister Boris Johnson on June 6. The vote showed that 211 of the 359 Conservative MPs backed Johnson; 148 wanted him to step down, missing the 180 votes needed to pass a motion of no confidence. Johnson will remain the leader of the Conservative Party and Prime Minister of the United Kingdom. Under current rules, Conservative MPs are not expected to hold another no-confidence vote for a year. Johnson expressed satisfaction with the voting results and hoped that everyone would start paying attention to other issues.
Bank of Japan Governor Haruhiko Kuroda said on Monday that the central bank's priority is to support the economy, stressing its unwavering commitment to maintaining "robust" monetary stimulus. USD/JPY closed up .81% at 131.88 on Monday. After entering the early Asian market on Tuesday, the yen maintained its downward trend, causing USD/JPY to continue to rise. It once refreshed a 20-year high to 132.29. The current exchange rate has fallen slightly and is trading around 132.25.
The Australian dollar closed 0.19% lower at 0.7192 on Monday. GMT+8 At 12:30 on June 7, the Reserve Bank of Australia will release its interest rate decision. Economists and traders forecast that the Reserve Bank of Australia is on track to raise interest rates for the first time in 12 years, which is expected to help the Australian dollar rebound. It is reported that the focus of market debate centered on the rate hike by the Reserve Bank of Australia.
Important data for Tuesday
Institutional view
1. The rise in U.S. bond yields supports the dollar against the yen if it is mainly supported by continued strong economic performance, Koji Fukaya of Market Risk Advisory in Tokyo wrote in a note.
2. Wells Fargo strategist Brendan McKenna said, therefore, the divergence between the dollar and the yen is unlikely to reverse in the short term. We expect the Fed to continue raising rates and the Bank of Japan to keep rates on hold for the foreseeable future, as long as this remains the case, the yen will continue to weaken
3. Bank of America currently expects the ECB to raise interest rates by 150 basis points this year and 50 basis points in July and September
4. Commonwealth Bank of Australia currency strategist Carol Kong said that the dollar against the yen may consolidate in the next few months and may move towards the upper end of the 126-131 range. While Japan's trade deficit could widen in the coming months and put upward pressure on USD/JPY, Japan's strong income surplus could provide some cushion. As long as Japan's current account remains in surplus, the yen can benefit from safe-haven funds.
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