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Dollar Retreats as Inflation Subsides in the UK and Europe - USDJPY Consolidates in the Mid-150 Range
Comprehensive London Forex Analysis.
“Dollar Retreats as Inflation Subsides in the UK and Europe - USD/JPY Consolidates in the Mid-150 Range, Comprehensive London Forex Analysis”
The London market observed a cessation in the selling pressure on the dollar. Sluggish growth in the UK inflation index, falling below expectations, triggered a sell-off in GBP/USD, prompting a moderate rebound in the dollar. Euro/dollar also experienced a softening, influenced by Italy’s revised consumer price index, contributing to bearish sentiment on the euro. Furthermore, the European Union adjusted its annual growth forecast from 0.8% to 0.6%, attributing this revision to higher-than-anticipated inflation rates, interest rates, and a sluggish external demand—significant factors impeding growth. Euro/dollar softened from 1.0880 to 1.0840, while GBP/USD retreated from around 1.25 to the 1.2450 level. European stocks displayed resilience, boosted by the alleviation of inflation concerns in the UK and Europe following the release of the US Consumer Price Index the previous day. Nevertheless, cross-yen pairs faced selling pressure, causing Euro/yen to briefly dip below 163 yen from the 164 yen level, and Pound/yen declined from 188.20 to 187.30.
USD/JPY traded within the mid-150 range. After a descent from the mid-151 range to approximately 150.79 in the preceding day’s New York market, a temporary rebound occurred in the Tokyo market. Subsequently, it sustained trading within a narrow range around the mid-150s. In London, USD/JPY encountered resistance on the upside as Euro/yen and Pound/yen displayed weakness, resulting in a minor softening to around 150.30.
Euro/dollar traded in the mid-1.08 range. Following an upward trend from around 1.07 to the mid-1.08 range in the previous day’s New York market, it was bought up to around 1.0884 in the Tokyo market. However, it maintained a narrow range. In London, downward pressure was exerted, temporarily pushing it to around 1.0844 due to Pound/dollar weakness and a deceleration in the decline of US bond yields. The subsequent movement stabilized, with anticipation building for the release of upcoming US indicators. Euro/yen peaked near 163.94, followed by a softening trend in London, extending to around 163.07. Against the Pound, Euro buying took precedence but retraced later. Adjustments were evident in response to the previous day’s New York market movement, influenced by the EU’s downward revision of growth forecasts and a deceleration in Italy’s consumer price index.
Pound/dollar traded in the mid-1.24 range. In the preceding day’s New York market, it ascended from below 1.23 to around 1.25. In the Tokyo market, it maintained levels in the mid-1.24 range. However, the early-morning release of the UK Consumer Price Index for October, indicating a year-on-year increase of 4.6% compared to the previous +6.7%, slower than anticipated, triggered selling in GBP/USD, resulting in a temporary dip to around 1.2454. Nevertheless, the price movement remained relatively restrained compared to the gains of the previous day. Pound/yen, after reaching a peak near 188.24 in the Tokyo afternoon, experienced a decline to around 187.36 in the initial stages of London trading. It continued to fluctuate within the lower range. Euro/Pound oscillated around 0.87 and ascended to around 0.8725.
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