2 min to read
A prevailing sentiment of selling the dollar is observed
coinciding with the anticipation of the U.S. Consumer Price Index (CPI) release.
“In the London forex analysis, a predominant trend of dollar selling is apparent, aligning with the imminent release of the U.S. Consumer Price Index (CPI)”
The U.S. 10-year bond yields have receded from approximately 4.24% to below 4.19%, signaling an anticipated deceleration in U.S. inflation. Early trading sessions witnessed movements favoring the sale of the pound and the acquisition of the euro. The unveiling of UK ILO employment statistics for the period from August to October in the early London hours induced pound selling due to wages growing at a slower pace than expected. However, the subsequent release of the German ZEW Economic Sentiment, which occurred after London’s early hours, surpassed expectations.
As we approach the forthcoming monetary policy announcements from both the Bank of England and the European Central Bank later in the week, market participants anticipate adjustments in the prevailing trends of purchasing the pound and divesting the euro. Euro-dollar has ascended from the upper 1.07 range to the mid-1.08 range. On the other hand, pound-dollar initially experienced a descent from the upper 1.25 range to briefly below 1.2550 but has since rebounded.
The dollar-yen pair is trading in the mid-145 range. After reaching a peak near 146.19 in the Tokyo morning session, it softened in response to the decline in U.S. bond yields. Position adjustments may be linked to the swift and consecutive fluctuations witnessed over the past few days. Some analysts also highlight yen buying. Following its dip to around 145.20 in the early London hours, it rebounded to approximately 145.60 but retreated once again as U.S. bond yields declined, widening the low to around 145.18.
Euro-dollar is currently trading around 1.08. Commencing from the Tokyo morning lows near 1.0760, it has consistently experienced buying pressure. Upon entering the London session, it extended its high from the mid-1.08 range to around 1.0807. The better-than-expected German ZEW Economic Sentiment has contributed to increased euro buying. Euro-yen has exhibited signs of stabilization. After a decline from around 157.35 in the Tokyo market to near 156.50, it temporarily rebounded to the 157 yen range during the London hours and subsequently settled in the mid-156 range. Euro buying against the pound has become more prominent, likely influenced by position adjustments ahead of the central bank policy meetings in the latter part of the week.
Pound-dollar is currently trading in the upper 1.25 range. While it was bought from the mid-1.25 range to around 1.2580 in the Tokyo market, the release of UK employment statistics during the early London hours, indicating a slowdown in wage growth, exerted selling pressure. After widening the low to around 1.2543, it swiftly rebounded to the upper 1.25 range. Pound-yen is exhibiting a soft tone. After reaching a peak near 183.59 in the Tokyo morning, it has predominantly followed a downward trajectory. In the early London hours, it extended the low to around 182.49 and has since maintained a heavier bias in the upper 182 range. Euro-pound is approaching 0.86 from the 0.8550 range, signifying a trend of selling the pound and buying the euro.
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