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  • richard evans

Yen higher but doesn't look like intervention, ZAR lower after election

Good morning

 

The US dollar has been pushing higher very slowly over the past couple days ahead of some of the key data due out of the US, in the form of GDP today and PCE deflator tomorrow.  GBPUSD is currently 1.2690, EURUSD 1.0795, both close to 100 pips off the highs seen earlier in the week.  GBPEUR is 1.1755, still unable to really break above 1.1770 despite a valiant effort yesterday morning.  The stronger USD comes despite Feds Bostic saying he is hopeful prices will normalise over the next year and hopes the Fed will be in a position to cut rates in Q4 2024.

 

The most interesting move has been in USDJPY, which has bucked the stronger dollar trend and traded 100 pips lower from the overnight highs of 157.70 to sit now 156.70, taking GBPJPY back below 200 to reach 198.90, where we are now.  The move was reasonably stead rather than the straight line moves we have seen with the recent intervention. Friday should see the latest intervention data on Friday which covers the period from late April to 29 May which should show the scale of Yen buying.  It is mildly interesting that this latest move lower came outside that time period, so we will not know for some time whether this was the result of official yen buying, however the speed and scale of the move suggests it may well not be.

 

ZAR is a little weaker following the South African elections, although it can take up to seven days or so for the full results to be announced.  We do have the SARB rate announcement today, rates are widely expected to remain unchanged at 8.25%, the focus will more likely be on the election results.  At the moment it seems that ANC have underperformed expectations, GBPZAR currently 23.70, the highest level since late April.

 

NZD is a little weaker following the NZ budget, some talk of potential credit agency downgrades no doubt having some impact.  AUD is also a little lower despite news that China will remove bans on five Australian beef exporters.  GBPNZD and GBPAUD are now 2.0825 and 1.2930 respectively.

 

There is potential for a bit of volatility today although tomorrow’s US PCE deflator is the key talking point for now.  This is my last full day in the office for the week although you’ll be lucky enough to get a report from me tomorrow morning.  I’m still aching after my round Tuesday so goodness knows what I’ll be like after a full weekend of golf.  Ah well, it’ll be fun.  Looks like it might stay dry as well, which would be a pleasant bonus.

 

Have a great day

 

 

-  10.00 EU consumer confidence

-  13.30 US GDP, personal expenditure, initial jobless claims

-  13.00 SARB rate announcement

-  15.00 US pending home sales

-  17.05 Feds Williams speaks

-  19.30 Feds Logan speaks

-  00.00 RBNZs Orr speaks

-  00.30 Japan unemployment, Tokyo CPI

-  00.50 Japan retail trade

-  02.30 China NBS manufacturing, non-manufacturing PMI

-  07.00 German retail sales

 

 

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