Editorial & Advertiser disclosure

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Trading

Yen gains before Powell speech, Aussie jumps

Published by Jessica Weisman-Pitts

Posted on November 29, 2022

Featured image for article about Trading

By Karen Brettell

NEW YORK (Reuters) – The greenback edged lower against the Japanese yen on Tuesday with Federal Reserve chairman Jerome Powell due to speak on Wednesday, while the Aussie dollar jumped as sentiment improved on hopes that China would reopen from COVID shutdowns.

Powell’s comments will be evaluated for any new signs of hawkishness, with key jobs data for November due on Friday.

The dollar index has fallen to 106.82 from a 20-year high of 114.78 on Sept. 28 as investors look toward the U.S. central bank reaching a peak rate early next year with inflation pressures expected to subside.

“We had a sizable reversal in the dollar since the October CPI report, so that’s probably a symptom of Fed tightening fading as a force of dollar support as markets increasingly look for peak Fed policy early next year,” said Vassili Serebriakov, FX strategist at UBS in New York.

The U.S. central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14, though the odds of a 75-basis-point increase have risen over the past several weeks and now stand at a 37% probability.

Traders are pricing for the Fed funds rate to peak at 5.01% in June, before falling back to 4.64% by December 2023.

The euro fell 0.15% against the U.S. currency to $1.0324. The greenback dipped 0.15% to 138.69 Japanese yen.

Moves in dollar/yen are highly correlated to U.S. interest rate policy and the Japanese currency has benefited as investors pare back expectations for further aggressive U.S. rate hikes.

Data on Tuesday showed that U.S. consumer confidence slipped to a four-month low in November, with households less keen to spend on big-ticket items over the next six months amid high inflation and rising borrowing costs.

A separate report on Tuesday showed the S&P CoreLogic Case-Shiller national home price index rose 10.6% on a year-on-year basis in September, slowing from August’s increase of 12.9%.

The Aussie jumped after health officials said that China will speed up COVID-19 vaccinations for elderly people, aiming to overcome a key stumbling block in efforts to ease unpopular “zero-COVID” curbs.

Risk appetite had worsened on Monday after protesters and police clashed over the stringent COVID restrictions.

Chinese authorities have begun inquiries into some of the people who gathered at weekend protests as police remained out in numbers on the city’s streets.

The risk-sensitive Aussie dollar, which is strongly tied to Chinese growth, gained 0.46% to $0.6684.

The offshore yuan also rose against the dollar to 7.1445.

Euro zone inflation data due on Wednesday is also in focus after figures showed inflation in Spain and Germany came in below expectations.

European Central Bank President Christine Lagarde said on Monday euro zone inflation had not peaked and it risked turning out even higher than currently expected, hinting at a series of interest rate hikes ahead.

========================================================

Currency bid prices at 3:06PM (2006 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 106.8200 106.6200 +0.21% 11.663% +106.8600 +106.0500

Euro/Dollar $1.0324 $1.0340 -0.15% -9.18% +$1.0395 +$1.0323

Dollar/Yen 138.6850 138.9050 -0.15% +20.48% +139.3450 +137.8900

Euro/Yen 143.18 143.64 -0.32% +9.87% +144.0200 +143.0200

Dollar/Swiss 0.9540 0.9489 +0.55% +4.60% +0.9544 +0.9461

Sterling/Dollar $1.1946 $1.1958 -0.09% -11.66% +$1.2063 +$1.1946

Dollar/Canadian 1.3584 1.3496 +0.69% +7.47% +1.3645 +1.3409

Aussie/Dollar $0.6684 $0.6653 +0.46% -8.05% +$0.6749 +$0.6641

Euro/Swiss 0.9847 0.9811 +0.37% -5.03% +0.9871 +0.9814

Euro/Sterling 0.8639 0.8647 -0.09% +2.85% +0.8652 +0.8608

NZ $0.6193 $0.6161 +0.54% -9.51% +$0.6253 +$0.6162

Dollar/Dollar

Dollar/Norway 10.0145 10.0315 -0.27% +13.56% +10.0215 +9.9395

Euro/Norway 10.3427 10.3508 -0.08% +3.29% +10.3730 +10.3045

Dollar/Sweden 10.5900 10.5539 +0.22% +17.43% +10.5950 +10.4797

Euro/Sweden 10.9292 10.9054 +0.22% +6.79% +10.9388 +10.8826

(Additional reporting by Joice Alves in London; editing by Mark Heinrich)