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European currencies have shown strength
adjusting to last week's movements as the U.S. holiday approaches.
“European currencies, encompassing both the Euro and the Pound, are displaying noteworthy resilience as they adjust to the prior week’s developments, all while the impending U.S. holiday looms on the horizon”
Within the London market, we observe a robust performance by European currencies, specifically the Euro and the Pound. Last week’s release of U.S. employment statistics brought with it a surge in non-farm payrolls, surpassing initial expectations. However, this optimism was tempered by revisions downward in prior figures, an unexpected uptick in the unemployment rate, and a deceleration in wage growth. These factors collectively fostered heightened anticipation within the market for a gentle descent in the trajectory of the U.S. economy.
In parallel, global stock markets have exhibited resilience throughout the week, with European stocks in London notably on an upward trajectory. Against the backdrop of uncertain movements in U.S. bond yields, we’ve witnessed a concurrent rise in yields for both British and German bonds. Consequently, we see a corresponding increase in demand for European currencies, particularly the Euro and the Pound. Euro/dollar initially experienced a decline, touching approximately 1.0772 during the early hours in Tokyo subsequent to the release of U.S. employment statistics last week. Nevertheless, it has since demonstrated a steadfast recovery, reaching approximately 1.0807 during the early hours in London, maintaining a presence around the pivotal 1.08 level. Euro/yen, commencing its journey from a low point of 157.33, ascended to 158.18 in the early London hours and currently remains stable within the 158 yen range. Pound/dollar is actively traded in the mid-1.26 range and has surged to approximately 1.2643 from the low-1.26 levels seen following the release of U.S. employment statistics last week. Meanwhile, Pound/yen, fluctuating within the mid-184 range, experienced a substantial surge during the early hours in London, reaching around 185.01. Additionally, the Pound exhibits strength against the Euro.
In the realm of dollar/yen, trading has been observed in the mid-146 yen range. This follows a period of fluctuations, initially oscillating between the mid-144 yen range and the mid-146 yen range following the release of U.S. employment statistics last week. As the new week commenced, it initiated trading on a high note. During the early hours in Tokyo, it remained relatively stable around the 146.02 mark. In the early hours of London, it briefly experienced a surge, reaching approximately 146.46, surpassing the previous week’s high. Subsequently, it has maintained its position within the mid-146 yen range. Encouragingly, European and U.S. stock futures are performing robustly, thereby providing support for the dollar/yen exchange rate. It’s imperative to bear in mind that the New York market will be closed in observance of Labor Day.
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