The trend of dollar selling continues this week. With a series of weak US economic indicators, it is predicted that the pace of interest rate hikes by the US Fed will slow down in the future. U.S. Treasury yields have trended downwards throughout the week. The 10-year U.S. Treasury yield peaked at around 4.3% and is hovering below 4% today.
In addition, trends in the dollar-yen and pound-dollar exchange rates have supported the dollar-selling movement. For the dollar/yen, repeated interventions by the government and the Bank of Japan (masked interventions) have created a psychological barrier for the market to rise above 150 yen, which has led to an adjustment in the dollar’s strength. The acceptance attitude of the United States also gave a sense of security.
For the pound-dollar, the large-scale tax cuts proposed by the former Truss administration, which lacked financial resources, caused the pound to plummet. Naturally, dollar buying is under pressure to adjust.
Next week, attention will be focused on the content of the FRB Chairman Powell’s press conference at the US FOMC. Markets are keenly interested in whether there will be any mention of a slowdown in rate hikes in the near future. Then comes the US jobs report, followed by the next week’s US consumer price index. Ahead of a series of events, it seems likely that there will be a short-term adjustment today.
It is assumed that the major trend will continue to be US dollar selling. Correction of the excessive strength of the US dollar.