I would like to pay attention to the trend of the pound-dollar today to see if the trend of the dollar’s depreciation will continue. The trend of the dollar’s depreciation is due to expectations of a slowdown in the pace of interest rate hikes by the US Fed. Last week’s slowdown in US consumer price index growth had an impact on the dollar’s selling direction, and yesterday’s US producer price index numbers also suggested that inflation had begun to peak out. However, after the release of the Producer Price Index, the dollar selling reaction was immediately followed by autonomous buybacks, and the dollar selling has come to a halt in the short term.
Yesterday, reports circulated in the New York market that a missile believed to be made in Russia fell into Poland, killing two people. The market has shown a history of risk-averse dollar-buying reactions. U.S. President Biden later said it was unlikely that the missile was fired from Russia. It was reportedly a Ukrainian surface-to-air missile system. In general, the dollar exchange rate has remained stronger than when the US Producer Price Index was announced the previous day. Judging from the price movement, it seems likely that the dollar short positions may be accumulating in the short term.
Among them, the pound-dollar was at the psychological level of 1.20 in yesterday’s market. It has rebounded by 1650 points from the low of 1.0350 level during the previous Truss administration. With events such as the announcement of the UK price index and the appearance of a series of senior Bank of England officials in parliament today, and the announcement of the medium-term financial plan by the Sunak administration tomorrow, the pound exchange rate is likely to attract attention. In the London market after this, I would like to check whether there will be a correction in the pound exchange rate.
Yesterday, the US Producer Price Index (PPI) was lower than expected, and although the US was tilted towards selling, it went completely wrong and resulted in a big loss cut. Today, we will pay attention to the price movement after October US retail sales.