This week was the week that changed from February to March. The dollar exchange rate started trading due to the adjustment of the dollar’s strength, but the strong US economic indicators continued again, and the dollar has returned to the strong movement. A decline in the number of US initial unemployment claims and a rise in US labor costs supported the dollar’s strength yesterday.
After this, the NY market will release the final figures for the US non-manufacturing PMI and the ISM non-manufacturing business index. The dollar exchange rate is likely to react nervously again to the degree of divergence between the forecast and the actual result. However, the US employment report, which is attracting much attention, will be released next weekend, and since it is also the weekend, the market reaction may be temporary.
The major currencies are showing individual price movements, even though the dollar is under pressure. The dollar/yen exchange rate rose from the low of 127.23 on January 16 to the 137 yen level yesterday, an increase of about 10 yen in less than two months. Along with the speculation that US interest rates are likely to stay high for a long time, speculation that the Bank of Japan’s Ueda new regime is likely to be launched with continued easing seems to be leading to dollar-yen buying.
The direction of the Eurodollar is confusing. Despite being pushed by dollar buying, sticky high inflation is observed in Europe, and the ECB’s stance of continuing interest rate hikes is strong. On the other hand, the pound-dollar is under strong downward pressure. As the G7 nations were among the first to raise interest rates, the risk of a cooling of the economy is gradually increasing. Bank of England Governor Bailey has also refrained from commenting on further interest rate hikes.
Pay attention to the US February ISM non-manufacturing index
However, as a recent trend, it is easy for the US dollar to sell on weekends after adjustments in USD buying, so we expect the US dollar to sell today as well.