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The USDJPY currency pair has continued to maintain levels in the upper 149
occasionally flirting with the 150 threshold.
“In the latter stages of the New York trading session, the USD/JPY currency pair has continued to maintain levels in the upper 149, occasionally flirting with the 150 threshold”
As we enter the October trading landscape, the forex market has initiated with a prevailing bias toward the US dollar. While vigilance is warranted concerning potential interventions, there is a conspicuous absence of substantial inclination towards selling during rebounds. Seasoned market participants appear to be biding their time, awaiting the opportune moment for strategic maneuvers.
Apprehensions regarding a prospective US government shutdown have been averted through the eleventh-hour approval by Congress of a short-term budget extension spanning 45 days. Moody’s, the sole major credit rating agency to uphold the ‘Aaa’ rating for US bonds, had issued warnings of potential repercussions on ratings in the event of a government shutdown. Nonetheless, the passage of this interim budget has instilled a measure of reassurance. Yet, prudence dictates vigilance as another deadline looms on the horizon in mid-November, preserving an air of uncertainty.
This upcoming Friday holds the eagerly awaited release of US employment statistics, an event now poised to unfold seamlessly, thanks to the avoidance of a government shutdown. The market is positioning itself in anticipation of this impending announcement.
While the market maintains its cautious stance toward the Federal Reserve’s hawkish posture, it does not anticipate that the forthcoming US employment report will significantly reshape this outlook. Some even speculate that it may not act as a catalyst for substantial fortification of the US dollar.
The EUR/USD currency pair persists in its quest for lower levels, with today’s trading activity driving it beneath the pivotal 1.05-dollar threshold, with no apparent bottom within immediate sight.
Analysts posit that the Euro may become even more susceptible to adverse developments in light of deteriorating economic prospects, particularly given the subdued growth forecasts for both China and the Eurozone. Recent inflation data from the Eurozone, unveiled on Friday, has exhibited a deceleration in both overall and core inflation, further affirming the notion that the European Central Bank (ECB) is unlikely to embark on additional rate hikes in the near term.
The GBP/USD currency pair also sustains its downward trajectory, trading at levels not witnessed since March. The present focus centers on the testing of the psychological 1.20-dollar threshold, but if this level is breached, the 1.18-dollar mark, last visited in March, enters the frame of consideration.
The market has adjusted its expectations regarding further rate hikes by the Bank of England (BoE). Nevertheless, there remains a degree of anticipation for one additional rate increase. Today, we observed remarks from MPC member Mr. Mann, renowned for his hawkish stance. Mr. Mann has not deviated from his core narrative, which accentuates robust domestic demand and the enduring presence of inflationary pressures. However, he has also intimated a necessity for a more restrictive monetary policy stance, hinting at potential support for additional rate hikes in the months ahead.
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