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  • richard evans

US dollar regains recent losses

Good morning

The main story for now is that US dollar has regained some of the ground it lost late last week. GBPUSD is at 1.2050, EURUSD 1.0675 and USDJPY is all the way back up to 132.35 despite expectations Ueda will be announced as BoJ Governor nominee in the coming days. Yen has jumped higher last week on fears his appointment may lead to tighter monetary conditions but his comments that he had no immediate plan to change policy did calm the markets down. We will however be watching for any mention of his longer term views.

GBP would likely be lower if it weren’t for some press reports suggesting Sunak is looking at plans to rebuild relations with EU post-Brexit. Quite right too. While Brexit was divisive and upset our closest neighbours, we surely can’t stay mad at each other forever. A closer friendship with our European friends is in everyone’s interests.

I have been watching with interest the news over the weekend that US have shot down three more high-altitude unidentified objects, while China has also said they are watching and may shoot down an object they have spotted. The US have said they are not sure how the objects were able to stay in the air, with no visible propulsion system and wouldn’t rule out whetehr the objects were extra-terrestrial. Twitter will no doubt be teeming with talk of alien invaders.

I guess this will continue until we get some information as to what these objects are, but money still has to be on Chinese spy systems. One has to wonder how long and how many of these things have been floating around without us ever knowing about them. I’m not sure we’ll ever know the full truth behind the objects, but while we are waiting for some clearer information, I’d expect teams of teenagers to be building some sort of drone/balloon mix to send up to see if they can get it shot down. Guess I’d be thinking that if I were younger anyway.

An interesting calendar today, with not an ounce of UK, US or EU data on the agenda. Highly unusual that’s for sure. Some data overnight from Japan and down under, while early tomorrow morning we have the UK unemployment release. Tomorrow also sees EU GDP and also the US CPI release which unsurprisingly seems to be key to be the key for short term direction.

Congratulations to the Kansas City Chiefs for beating Philadelphia Eagles in the Super Bowl. By all accounts it was a bit of a thriller, with scores level with seconds to go, the match was won by a field goal to put the Chiefs 38-35 up. I didn’t see it, I’m not against American football, in fact I can find it quite absorbing but it didn’t start until close to midnight. I’m not that much of a fan. I think it’s the thought of beer and hotdogs and wings that draws me to the game!

- 23.30 AUS Westpac consumer confidence

- 23.50 Japan GDP

- 02.00 NZ RBNZ inflation expectations

- 04.30 Japan industrial production

- 07.00 UK unemployment

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