Yesterday’s US FOMC meeting minutes are from when it was decided to raise interest rates by 0.75%. Strong measures to curb the current high inflation are advocated. Among them, the market reacted to words such as “recognition that the pace of interest rate hikes will slow down at some point, and recognition of the risk of the possibility of tightening more than necessary”, and the initial movement of dollar selling was shown. However, there is a history of returning to the dollar high route immediately.
In the early morning hours of London, the dollar-yen exchange rate is in the low-135 yen range, the euro-dollar exchange rate is in the high-1.01 range, and the pound-dollar exchange rate is in the low-1.20 range, with dollar buying prevailing.
At present, CME FedWatch shows that 58% expect a 50bp rate hike and 42% expect a 75bp rate hike, with no noticeable change from before the minutes were released.
In the London market, it is expected that trading will begin with the dollar gradually strengthening while keeping an eye on trends in US bond yields.
Today, we are looking to buy USD again. If there is a place to enter, I would like to enter by buying USDJPY.