The biggest movement in the US dollar, we’ve seen and new balance for the euro is now looking for a new trading range, and to do so at the current level, the first movement is needed.
The Federal Reserve did not actually say much last Wednesday evening. There are now two more directors than before who expect that interest rates could be increased before 2024. The effect of this illustrates how relevant What the Fed says is. This led to an increase in nominal and real interest rates. The difference in the ten-year interest rate adjusted for inflation between the US and Germany and Japan has increased. As a result, the dollar has increased in value against the euro and the yen. The ECB remains open-minded and this has a negative impact on the euro..
Swiss Franc is flat and may retreat
The Swiss central bank left monetary policy unchanged and indicated its willingness to intervene in the foreign exchange markets if necessary. The bank thinks the franc is still expensive. Since the beginning of May, the Swiss franc has risen against the euro, bringing the euro/franc below the level of 1.09. We think that the rise of the franc in relation to the euro will soon come to an end and that the franc will even begin to fall. The Swiss central bank is likely to remain active in the foreign exchange markets, the strength of the franc to the limit. In addition, we believe that the ECB may be more likely to raise interest rates than the Swiss central bank. But that will take years.
Norwegian krone makes the day at the foreign exchange markets
The Norwegian central bank also left monetary policy unchanged, but indicated that interest rates could possibly rise in the autumn. This would be the first Central bank of the major currencies to raise policy interest rates. As a result, the Norwegian krone rose. We expect the crown may rise further. Policy interest rates are a positive factor as is the good state of the economy. If the oil price starts to fall, this may temporarily have a negative effect on the crown.
The Central bank of Japan, the Bank of Japan, kept the interest rate unchanged at zero percent on Friday. Japan’s consumer prices fell on an annual basis in May. On a monthly basis there was a plus, in this case 0.3%.
USD data expected to be no earlier than next week, with the dynamics in the foreign exchange market, with Tuesday the sale of the existing property in the United States in may, and on Wednesday, several company reports, and Thursday’s interest rate decision by the reserve Bank of India.
Pound to dollar exchange rate declined after negative retail news
This morning there were some macro figures in Europe. German producer prices in May rose 1.5 percent on a monthly basis, up 7.2 percent on an annual basis. UK retail sales unexpectedly declined on a monthly basis in May. Friday’s GBP fall in may be attributed to this event.
In conclusion, the European Central Bank reported an accumulated current account surplus of EUR 23 billion in April. The president of the International Monetary Fund, Kristalina Georgieva, will be the only speaker of interest on Friday.
On Friday, the euro stood at 1,1912 dollars. The European currency recorded 0.3% higher at £ 0.8579. The British pound fell by 0.3 percent on Friday and stood at 1.3887 dollars. The dollar recorded 0.1 percent lower at 6.4424 Chinese yuan. Today, the dollar dropped 0.1 percent to 110,1380 yen. The euro cost 1,0947 Swiss francs and 10,2139 Norwegian krone.