This week, inflation-related indicators released on the 14th and 15th were lower than market expectations, increasing market expectations for an early interest rate cut by the US Federal Reserve.
The dollar index fell to its lowest level since September 1, and the yield on the 10-year US Treasury note hit a two-month low of 4.379%.
“The recent flurry of data points to progress on the inflation front,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets.
The dollar index fell 0.49% on the day to 103.85. Stocks fell about 1.8% for the week, the biggest weekly decline since mid-July.
“Everything points to a slowdown in the U.S. in the fourth quarter,” said Thierry Wismann, global foreign exchange and rates strategist at Macquarie in New York. The key signal is that companies are revising their growth forecasts downward.
The euro/dollar exchange rate rose 0.52% to $1.0906. The revised Eurozone Consumer Price Index (HICP) for October announced by the European Union (EU) Statistics Office on the 17th showed a year-on-year increase rate of 2.9%, unchanged from the preliminary figure, compared to September’s 4.9%. It has significantly slowed down from 3%.See more
The dollar/yen pair fell below the 150 yen level for the first time in about two weeks, dropping 0.69% to 149.68 yen. The stock fell about 1.4% for the week.
Speaking at the House of Representatives Finance and Financial Services Committee on the 17th, Deputy Finance Minister Ryomasa Akazawa explained that “we are not intervening with a specific level in mind.” He added, “Forex intervention is only in response to excessive fluctuations in exchange rates, and we do not necessarily take the position of intervening because the yen is depreciating.”See more
Lee Hardman, a currency analyst at MUFG, said the strong yen reflects the fact that there are “increasing concerns about shrinking growth” worldwide. He said Japan’s terms of trade have not been significantly affected by the decline in energy prices.
The Office for National Statistics (ONS) announced on the 17th that October retail sales (volume basis) unexpectedly decreased by 0.3% from the previous month, but the pound/dollar exchange rate rose 0.42% to 1. It became $2,458.See more
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