For the week of August 21st to August 25th, the trading resulted in a loss of -1,118 USD.
There were no significant events during the week, other than Chairman Powell’s speech at the Jackson Hole conference. The market largely remained within a range.
Chairman Powell’s notable comments indicated a hawkish stance, suggesting that they are prepared to raise interest rates further if appropriate. However, since this was somewhat anticipated, there was a possibility of a “sell the fact” reaction, so we responded by selling USD.
Yet, the actual market reaction was straightforward with buying USD. Even though we entered with a strong buy, the values didn’t increase as expected, leading to a negative outcome.
From the 28th, due to the end and beginning of the month, there will be many economic indicators, and we expect more vigorous price movements.
Key points to watch:
- Fed Chairman Powell Ready for Additional Rate Hikes if Needed – Maintaining High Interest Rates The Federal Reserve Chairman, Powell, indicated the central bank’s readiness to move towards additional rate hikes if needed. He expressed his intent to maintain policy rates at a high level until they are convinced the inflation rate is on track towards their 2% target. According to the manuscript distributed prior to his speech at the Jackson Hole meeting (an annual symposium hosted by the Kansas City Fed), the inflation rate has decreased from its peak, but it’s still too high. (Source: Bloomberg) We expect a strong USD due to Powell’s unwavering hawkish stance.
- Focus on US Inflation Rate and Employment Statistics The USD/JPY will focus on the July PCE Composite Price Index and August employment statistics, which the Federal Reserve (FRB) is closely watching as inflation indicators, to determine the possibility of a rate hike at the Federal Open Market Committee (FOMC) meeting on September 19-20. The Japanese currency authorities have intervened in selling USD and buying JPY last year, but verbal interventions have been observed this year. It’s speculated that the intervention level has risen to around 150 yen. (Source: Trader’s web) We anticipate significant movements in the USD based on the July PCE Composite Price Index and August employment statistics. Caution is advised for the USD/JPY.
P.S. With continued hot days, many might be staying indoors in air-conditioned rooms. However, continuous confinement can lead to physical stiffness and reduced mental and physical power. Exercise is crucial. According to WHO data, 3.2 million deaths annually are attributed to a lack of exercise, ranking it the fourth leading cause of death worldwide. Even if one feels they can’t engage in intense workouts, walking is fine. Recent research by the Medical University of Lodz in Poland and Johns Hopkins University School of Medicine suggests that even 4,000 steps a day can have health benefits. By analyzing data from 226,000 people worldwide, they found that walking 4,000 steps a day can start reducing the risk of premature death from all causes. Moreover, just over 2,300 steps showed positive effects on the heart and blood vessels.
Please take this into consideration and maintain your physical and mental health.
Have a great weekend!