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  • richard evans

Watching USDJPY as it nears Oct 2022 highs

Good morning


The US dollar had a bit of a push higher Friday afternoon with GPUSD reaching 1.2190 and EURUSD 1.0665 but by the close they were back at 1.2225 and 1.0685, almost exactly the levels we have now. The USD strength was pared as Moodys adjusted the US outlook from stable to negative, citing downside risks to US fiscal strength.


However USD has continued to push higher against Yen with USDJPY now 151.85, only just a few pips short of the October 2022 highs. We saw intervention a few times back in 2022, the first time when USDJPY did hit the highs around 151.95,m it was quickly back to 149.00 and carried on to hit 146.20 or so later that day. Mind you GBPUSD was 1.1300 and EURUSD 0.9870 back then, what a difference a year makes!


There are many questions now as to the next rate move by the Fed. Some major players such as JPMorgan and Goldmans do see cuts in 2024 although their timings are rather different, JPM looking at June 2024 for the first cut, Goldmans wait until Q4 2024 for their first cut. Others see no rate cut through 2024 . None of this really helps us get an idea of USD direction mind you. Rate cuts may weaken USD but only if other nations are not also cutting rates.


RBAs stand-in AsstGov Kohler said she expects inflation to decline but the move lower will be much more gradual than previously anticipated.


It’s a quiet day calendar-wise but don’t be fooled the week is a busy one. Tomorrow we have UK unemployment, EU GDP and US inflation, Wednesday we have UK inflation and US retail sales, Friday sees UK retail sales and EU inflation. Throw in some Aussie employment numbers, Japan GDP and trade balance for good measure


Biden meets China President Xi in San Francisco this week. Reports suggest the SF streets have been cleared of homeless people ahead of the meeting. I’ve seen a few clips of Biden talking where he loses complete track of what he was saying, the fear is he’s losing his marbles a little. Never sure if this is real footage, AI-altered clips or just someone cleverly snipping bits of film together but it is worrying nonetheless.


Made me remember my idea of a bet for next US President, I’d backed Kamala Harris who as vice-president would step in as president should anything happen to Biden. I’ve looked for the odds, can’t actually find ‘next president’, instead its all about 2024 election winner. The current favourite is Donald Trump, which surprised me greatly. Biden is second favourite. 300+million people and that’s the best they can come up with.


In other news, Chelsea v Man City gave us one of the best matches of the Premier League, it finished 4-4, surpassing the previous nbest which could have been the madness of the Spurs Chelsea match last week. Less we talk about Spurs the better!


Other items in the news that got my attention was the fears of an imminent volcano eruption in Iceland after a series of earthquakes which has led to the evacuation of a small town called Grindavik. Experts suggest we could be hours away from an eruption. Hopefully we won’t see an issue with air travel as we saw back in 2010. Worries of a different sort on the streets of Ladispoli, a seaside report 30 miles west of Rime, where a lion escaped a circus and was filed wandering the streets until it was recaptured.


Weather is also in the news, this time it is storm Debi that is set to bring rain and strong wind in some areas. Not sure it’ll hit us but the forecasts looks pretty miserable anyway, with rain forecast almost every day for the next couple of weeks. Just what we need.


Finally, as I’d feared we saw some bad images of protests on Armistice day. Suella Braverman has been sacked as Home Secretary. She was always going to struggle to keep her job, I’m really not convinced she was to blame for the protests, nor is she to blame for trying to sort out immigration, but conservatives would never be winning an election with her in a high-ranking position. Some questions now over who will take on the poisoned chalice of the home secretary role. James Cleverly is being touted, although David Cameron has been seen around Downing St this morning. With a lack of economic data today, the cabinet reshuffle will be our entertainment.



- 10.00 EU growth forecasts

- 16.05 BoWs Mann speaks

- 19.00 US monthly budget statement

- 00.30 AUD Westpac consumer confidence

- 07.00 UK unemployment


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