“There are many events this week, but today is a day in between.” Yesterday and the day before yesterday, Fed Chairman Jerome Powell testified before Congress. Tomorrow is BOJ Governor Kuroda’s final monetary policy meeting and the release of the US employment report, one of the most closely watched indicators of the US economy.
The dollar exchange rate showed signs of appreciation in response to Powell’s testimony, which was more hawkish than expected. Currently, the US dollar is in a struggle with its high level. The dollar/yen is supporting at the 136 yen level after hitting the 137.91 level yesterday in the Tokyo market, a new high this year. The euro/dollar will only recover to the upper-1.05 level after declining to the lower-1.05 level. After falling to the 1.18 level, the pound-dollar exchange rate has remained unchanged.
The Bank of Canada was the first to suspend interest rate hikes this week, and the Bank of Australia’s statement suggested that the monthly CPI had passed its peak. At the Bank of England, Commissioner Mann and Commissioner Tingla are arguing for the hawk and pigeon extremes, and it seems that the next big interest rate hike is being nipped in the bud. As for the ECB, hawkish members have been touting the view that the ECB will continue to raise interest rates significantly even after March. But yesterday he warned that Italian central bank governor Visco had agreed not to give such guidance.
The composition highlights the stance of continuing US interest rate hikes based on strong fundamentals. Tomorrow’s US employment report and next week’s US consumer price index will undoubtedly be the key to continued dollar appreciation.
With the Bank of Japan and the US employment statistics coming tomorrow, we expect the market to enter a range with a wait-and-see attitude today.
