3 min to read
Following an initial phase of dollar selling
the market has entered a consolidation period.
“In the London foreign exchange market, following an initial phase of dollar selling, the market has entered a consolidation period”
With the Tokyo market closed for Labor Thanksgiving Day, prevailing sentiment in the Asian market favored selling the dollar. This adjustment comes on the heels of the dollar’s gains in the preceding New York session. Given the closure of the U.S. bond market for Thanksgiving, the absence of interest rate cues has contributed to the observed adjustment. The dollar-yen pair underwent a decline from approximately 149.60 to 148.90 in the early London session. However, as London trading commenced, a buying rebound took place, limiting the drop to around 149.30, followed by a consolidation phase.
For the euro and pound, today’s release of flash PMI figures played a pivotal role. Initially, the euro faced selling pressure as the French PMI indicated weakness. Subsequently, a positive reaction ensued as the German PMI demonstrated strength. Although the overall figures for the Eurozone were robust, the euro exchange rate remained in a state of flux. The Euro to Dollar pair fluctuated between the mid-1.09 range and 1.0930 after initially dropping below 1.09. The subsequently released UK PMI figures for services and the composite index both surpassed 50, signaling a notable recovery since July. This resulted in increased demand for the pound, causing the Pound to Dollar pair to surge from around 1.25 to 1.2560. Pound buying dominance was also evident against the yen and the euro.
Despite mixed trading activities in the London market, there hasn’t been a significant reversal of the dollar weakness trend observed in the Asian session. With the impending closure of the New York market due to the Thanksgiving holiday, momentum appears to be gradually diminishing.
The Dollar to Yen pair is trading in the mid-149 yen range. After reaching a high around 149.59 in the early Asian session, the pair showed a bias towards the downside. In the early London session, it declined to around 148.89. However, as London trading progressed, the pair found support around 149.30 and has since been consolidating.
The Euro to Dollar pair is trading in the mid-1.09 range. During the Asian session, it was initially bought from the early low of around 1.0884 to the mid-1.0910. In the London session, it reacted to the release of European PMI figures. The French PMI led to a temporary drop below the mid-1.09 level, while the German PMI pushed it to around 1.0930. Despite better-than-expected Eurozone figures, the pair settled into consolidation in the mid-1.09 range. The Euro to Yen softened to around 162.40 in the Asian session but displayed resilience, briefly reaching the 163 yen range during the London session. It currently shows a minor decline towards the previous day’s closing around 162.85. Against the pound, the euro is exhibiting weakness.
The Pound to Dollar pair is trading in the mid-1.25 range. In the Asian session, it experienced a slight rise from below 1.25 to around 1.2530. The unexpected strength in the preliminary UK PMI figures led to a rapid surge to around 1.2564. It has since maintained a higher level. The Pound to Yen faced a dip to around 186.30 in the Asian session, followed by a pause in the decline. As London trading commenced, both the Pound to Dollar and Pound to Yen pairs surged to around 187 yen and 187.56, respectively. It is currently maintaining levels around 187 yen. The Euro to Pound pair faced resistance around 0.8720 and swiftly dropped to around 0.8680. Subsequent recovery has been limited. The preliminary UK PMI figures, showing the non-manufacturing sector and the composite index both exceeding 50, have left a positive impression, signaling economic recovery.
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