The US FOMC yesterday announced a 0.25% rate hike. The interest rate outlook showed a rate hike at each meeting this year. Chair Powell mentioned the possibility of announcing the reduction of the balance sheet as early as May. It has been confirmed that the route has changed from monetary easing to monetary tightening and normalization.
It is still unclear whether the rate hike will continue by 0.25% on a regular basis. It depends on the situation such as rising inflation and the situation in Ukraine. However, the dollar buying pressure is likely to continue for a while due to the route change. In comparison with the Bank of Japan, which is the furthest from the start of the rate hike, will the dollar-yen pair aim to exceed the 120-yen level?
Today, the British Monetary Policy Committee (MPC) announces monetary policy. The market is expected to raise rates by an additional 0.25%. At the last meeting before the Ukrainian War (starting February 24), opinions were divided 5 to 4 on the rate hike. The four negative votes were Deputy Governor Ramsden, Commissioner Saunders, Commissioner Haskel, and Commissioner Mann. There is a history that the rate hike was rejected by one vote and the rate was raised by 0.25%. Also, the start of QT was announced. With the outbreak of the Ukrainian war, the rate hike is expected to increase by 0.25%. However, the Bank of China is concerned about the current situation where households are under pressure, and is paying attention to the trade-off relationship between rising inflation and slowing growth. It may be dangerous to think that the rate hike route will continue to take root. Every time is likely to be a live meeting.
USD buying will not change in the future. However, yesterday it has risen to the 119 yen level, so it is assumed that it will be easy to sell profits once.
Also pay attention to the British Monetary Policy Committee (MPC) announced today. If there is an easy-to-understand movement in GBP, I am thinking of riding it.