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The USDJPY experienced a brief surge reaching 140.92 yen
before undergoing a subsequent adjustment to stabilize in the mid-140 yen range.
“The USD/JPY experienced a brief surge, reaching 140.92 yen before undergoing a subsequent adjustment to stabilize in the mid-140 yen range.”
During the weekend, significant progress was made as President Biden and Republican House Speaker McCarthy reached a tentative agreement on raising the debt ceiling. Further phone discussions on the 28th resulted in a final agreement. The details, unveiled after these discussions, outlined the suspension of the debt ceiling until January 1, 2025, enabling the federal government to access necessary borrowing. Additionally, for non-defense expenditures, it was agreed that spending levels for the fiscal year 2024 would remain relatively consistent with those of 2023, while experiencing a 1% increase for the fiscal year 2025. If both houses of Congress approve the agreement on the 31st, the debt ceiling issue will no longer pose a concern until after the upcoming presidential election.
The market exhibited a relatively calm response at the beginning of the week, likely influenced by reports of a close agreement in foreign markets on Friday. However, the morning session witnessed a robust movement, with the USD/JPY reaching 140.92 yen, representing a recent high. Subsequently, an adjustment phase ensued, characterized by a cautious approach among market participants due to limited market activity resulting from holidays observed in the UK and the US. Consequently, a prudent stance was taken when considering high-dollar purchases.
In the afternoon, selling pressure was observed, leading to a decline in the USD/JPY exchange rate, which settled around 140.30 yen.
The EUR/USD continued to trade within the low 1.07 range. Despite the recent strength of the USD towards the end of the previous week, the EUR/USD managed to sustain its position above the critical threshold of 1.0702, indicating a cautious attitude in response to downward pressure. Following an initial surge to 1.0714 during the morning session’s USD strength, a subsequent adjustment led to the currency pair stabilizing in the 1.0740 range during the dollar’s correction.
The EUR/JPY experienced a temporary increase, reaching 151.07 yen due to the rise of the USD/JPY. However, it soon corrected and settled in the 150 yen range.
Following the victory of incumbent President Erdogan in the presidential election over the weekend, the Turkish lira faced minor selling pressure. As a result, the USD/TRY exchange rate hovered around 20.04. However, expectations persist regarding continued defense of the lira by the authorities, leading to a relatively narrow trading range.
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