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The USDJPY pair showed some signs of surpassing its recent high
reaching 138.91 yen at one point.
“The USDJPY pair showed some signs of surpassing its recent high, reaching 138.91 yen at one point.”
The USD/JPY pair exhibited signs of breaching its recent high, briefly reaching 138.91 yen. However, it encountered selling pressure near the key resistance level of 139 yen, subsequently consolidating within the lower 138 yen range. During the morning session on the 24th, it traded around 138.60 yen. Today’s upward movement has been limited, reflecting a somewhat lackluster performance. The weak opening of the Nikkei average set a cautious tone, driven by heightened risk aversion. Subsequently, the substantial decline in Asian equities during the afternoon intensified risk aversion, causing the downward momentum to widen. Furthermore, the decline in US bond yields exerted additional selling pressure on the US dollar.
At 11 o’clock, the Reserve Bank of New Zealand (RBNZ) unveiled the outcome of its monetary policy meeting, which aligned with market expectations, resulting in a 0.25% interest rate hike. Although some market participants had entertained the possibility of a 0.5% increase, the actual announcement prompted selling pressure on the New Zealand dollar (NZD). Since the previous meeting in April, where an unexpected 0.5% hike materialized instead of the projected 0.25% increase, market participants had remained vigilant. This contributed to the subsequent downward movement following the announcement. The RBNZ’s statement conveyed that interest rates had reached their peak following the current rate hike. Moreover, it hinted at the potential for a rate reduction in the third quarter of 2024.
The RBNZ Governor acknowledged the complex deliberations associated with maintaining the status quo or implementing an interest rate hike. The decision to keep rates unchanged or raise them by 0.25%, rather than the anticipated 0.5% hike, became evident, prompting selling pressure on the NZD. In response to the announcement, the NZD/USD pair initially hovered around 0.6245 before declining to 0.6159. Similarly, the NZD/JPY pair, which commenced the day around 86.60 yen, experienced a decline, reaching the level of 85.20 yen.
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