Forex Today: Dust settles after JPY intervention and BoE and SNB rate hikes

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This is what you need to know to trade today friday september 23:

Markets seem to have cooled off early on Friday after Thursday’s wild swings from Japan’s forex intervention, rate hikes from the Swiss National Bank (SNB) and the Bank of England (BoE). The Dollar Index is bouncing back and forth above 111.00 and US stock index futures are trading flat in early European morning. S&P Global will publish the preliminary PMI manufacturing and services report for Germany, the euro zone, the UK and finally the US before the weekend.

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In a dramatic turn of events, Japan’s top foreign exchange diplomat, Masato Kanda announced on Thursday that they had intervened in the foreign exchange market. In a press conference following this action, Japanese Finance Minister Shunichi Suzuki said they were concerned about excessive currency movements, but refrained from commenting on the scale of the intervention. Meanwhile, Kanda added that further action can be taken in the forex market any day and anywhere, even on holidays. Japanese markets are closed on Friday for the Autumn Equinox holiday. The pair USD/JPY fell to a two-week low of 140.35 after this event, but managed to rebound late in the American session. However, the pair ended up losing 200 points on Thursday before entering a consolidation phase slightly above 142.00 early on Friday.

Following its monetary policy meeting in September, the SNB decided to raise his interest rate by 75 basis points, up to 0.5%. Commenting on the outlook for monetary policy, President Thomas Jordan noted that negative rates will remain an important tool and will be used if necessary. The CHF suffered heavy losses against its main rivals and the USD/CHF it hit its highest level since early September at 0.9850 before retreating below 0.9800 later in the day. At press time, the pair was trading sideways around 0.9780.

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On Thursday, the The Bank of England raised its interest rate by 50 basis points. down to 2.25%, as expected. The initial reaction of the markets made the British pound lose interest, as the futures markets considered the possibility of a rise of 75 basis points as good. Five members of the Monetary Policy Committee voted in favor of the 50 basis point hike, while Haskel, Mann and Ramsden voted in favor of raising rates to 2.5%; Dhingra of the Monetary Policy Committee voted in favor of 2%. Regarding the fiscal measures introduced by British Prime Minister Liz Truss, the BoE argued in its monetary policy statement that the guarantee of energy prices can reduce the risk of persistent internal pressures on prices and wages, but he acknowledged that the risk remains significant. Although the GBP/USD managed to hold above 1.1300 for most of the day, came under heavy bearish pressure in the American session and dropped towards 1.1200. At time of writing, the pair is trading little changed on the day, slightly below 1.1250.

The EUR/USD failed to recapture 0.9900 and erased all of its previous gains to close the day slightly below 0.9850 on Thursday. The pair remains relatively calm above 0.9800 early on Friday.

The Prayed managed to capture some of the outflows from major currencies as investors looked for a safer alternative during Thursday’s wild action. However, with the 10-year US Treasury yield gaining more than 5% and topping 3.7%, XAU/USD struggled to retain its bullish momentum. The pair was last seen bouncing back and forth above $1,670.

The Bitcoin It snapped a two-day losing streak and gained 5% on Thursday before entering a consolidation phase around $19,500 early on Friday. Ethereum is up almost 7% on Thursday and is already up more than 1% so far today, trading above $1,300.

Source: Fx Street

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