Dollar buying pressure has prevailed this week. From the beginning of August, strong US employment data, slowing growth in the inflation rate and many volatile factors emerged. Still, there is no change in the aggressive stance of US Fed officials to raise interest rates ahead of the next FOMC meeting in September. In the US short-term money market, which reflects market sentiment, the 50bp rate hike and the 75bp rate hike are fluctuating up and down, but at present, the 50bp rate is 60% and the 75bp rate is almost fixed at 40%. A 50bp rate hike would be a modest hike compared to a 75bp hike, but it would be an exceptionally fast rate hike as 25bp is seen as the normal pace.
No US economic indicators are scheduled to be announced in overseas markets after this. Yesterday’s initial unemployment claims, the Philadelphia Fed’s index, and existing home sales ended the week’s release of key data. The number of pre-owned homes sold in July continued to be sluggish, down 5.9% from the previous month. On the other hand, the number of new unemployment insurance applications slowed to 250,000. The Philadelphia Fed index was +6.2, a sharp recovery from market expectations of -5.0 and -12.3 last time.
Regarding the remarks event, a lecture by Richmond Federal Reserve Bank President Birkin is scheduled. A question and answer session will also be held. Earlier this month, he said he would do what was necessary to bring inflation back to the 2% target, showing a hawkish stance along with other members. However, the recent series of remarks has not changed the market’s expectations for an interest rate hike. Markets are likely to focus on Powell’s speech at next week’s Jackson Hole meeting.
Continued to buy USD.
