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The London foreign exchange market experienced limited price movements
despite persistent pressure for a stronger US dollar.
“The London foreign exchange market experienced limited price movements despite persistent pressure for a stronger US dollar.”
The foreign exchange market in London demonstrated restrained price movements, despite the persistent upward pressure on the US dollar. During the Tokyo session, the USD/JPY pair achieved a notable milestone, surging to its highest level since March 17th at around 139.70.
However, encountering resistance, it retraced to approximately 139.30 during the early London session, exhibiting resilience and finding stability near 139.60. Notably, although European stocks faced selling pressure, the extent of the decline gradually diminished. Meanwhile, the yield on the 10-year US Treasury bonds experienced a modest upturn, rising from the 3.73% level to approximately 3.76%. Conversely, the EUR/USD pair continued to be subject to selling pressure, extending its downward trajectory from the Tokyo session and reaching a low around 1.0714 before stabilizing within the lower 1.07 range. Conversely, the GBP/USD pair garnered some buying interest, propelling it from the 1.2330 level to briefly touch around 1.2387 before settling in the lower 1.23 range.
In the current market sentiment, there is a prevailing inclination to sell the euro and favor purchasing the pound. Aligning with the movement of USD/JPY, the cross yen pairs also experienced downward trends. Specifically, the EUR/JPY pair temporarily declined to approximately 149.30 after encountering resistance near the 150 mark, eventually stabilizing within the upper 149 range. Similarly, the GBP/JPY pair found support around the 172 yen level and subsequently reached a peak near 172.77. Today’s release of Germany’s GDP data for the first quarter indicated a downward revision of -0.3% compared to the previous quarter, thereby affirming two consecutive quarters of negative growth.
Concurrently, German consumer confidence continued to dwell in negative territory. Although no major developments specifically impacting the pound were evident, the market has factored in a 1% interest rate hike later this year based on the elevated level of the UK inflation index reported the previous day. As anticipated, the Turkish central bank maintained its policy interest rates with minimal observable market reaction. In summary, despite persistent upward pressure, particularly against the yen, the US dollar showcased limited movements in the foreign exchange market.
Notwithstanding its momentary ascent against the yen during the Tokyo session, the dollar encountered resistance and experienced a retreat during the early London session. While European stocks faced selling pressure, the decline’s magnitude gradually diminished. The EUR/USD pair continued to be subjected to selling pressure, whereas the GBP/USD pair garnered some buying interest.
Aligned with USD/JPY, the cross yen pairs displayed downward trends. The market responded to Germany’s negative GDP data, while the pound benefited from robust UK inflation figures. However, overall market sentiment remains cautious, with a focus on forthcoming economic indicators and central bank decisions.
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