Both the Japanese yen and the British pound have been under a lot of pressure recently. GBP/JPY remains firm around 168.50 and economists at Rabobank believe that the pair could rise above the 170 mark.
key week for GBP and JPY.“Although UK fundamentals remain sour, it is possible that the risk of further panic selling of the pound may now be contained. That said, the week ahead will be another crucial one in terms of the outlook for GBP.”
“The outlook for the JPY is essentially a mix of two drivers. On one hand the BoJ’s accommodative monetary policy settings are undermining the JPY in an environment in which most other central banks are hiking interest rates. On the other hand, FX intervention from the MoF is designed to make speculators think twice about shorting the JPY.”
“We see risk of GBP/JPY moving above the 170.00 level in the short-term, though we expect that these levels could be difficult to sustain, and forecast that GBP/JPY is likely to be lower on a three-month view on the back of a weak pound.”
GBP/USD holds near 1.1300 as markets eye UK politics
GBP/USD is struggling to make a decisive move in either direction and fluctuating in a tight range at around 1.1300 in the second half of the day on Monday. Market participants keep a close eye on political developments in the UK while waiting for US PMI data.
EUR/USD recovers to 0.9850 area ahead of US PMI
EUR/USD has managed to erase a large portion of its losses as it climbed to the 0.9850 area in the early American session. The improving market mood limits the dollar’s gains ahead of the preliminary October PMI data from the US, helping the pair edge higher.
USD/JPY steadies around 149.00 after rollercoaster moves on alleged Japan intervention
USD/JPY treads water around 148.85 following a volatile start to the week which initially refreshed a fortnight low before recalling the buyers ahead of Monday’s European session.
Gold stays in red near $1,650 despite retreating US yields
Gold stays under modest bearish pressure and trades in negative territory at around $1,650 in the early American session on Monday. Ahead of the PMI data, the benchmark 10-year US Treasury bond yield is down nearly 1%, allowing XAU/USD to limit its losses.