Considering the Euro exchange rate
2023-06-14
■ The calculation of the ECB's additional interest rate hikes in June and July is significant, but the statement lacks specificity regarding the policy path.
■ There are potential signs for the pound against Switzerland, but focus on the euro's trend influenced by financial policies in the UK and Switzerland.
At the board meeting of the European Central Bank (ECB) on the 15th, there was a significant margin for a 0.25% increase in the main policy interest rate. The statement made by the Council after May proposed the viewpoint of "judging based on the tone of inflation trends and the strength of financial policy transmission, and evaluating the inflation prospects". The policy of sustained monetary tightening will be upheld in a situation where the fundamental price pressure is deeply rooted. Although the Council will also decide to increase interest rates in July, the statement and the press conference of President Lagarde will lack specific content related to the future policy path in the case of fear of economic stall in the euro area.
European countries Bank of England (BOE) and Swiss National Bank (SNB) will announce policy interest rates on the 22nd. The average wage growth for February to April announced tonight in the UK has accelerated, and it is expected that the real GDP for April will also be demodulated tomorrow. Yesterday, the BOE Financial Policy Committee expressed its difficulty in ending the monetary tightening cycle and continuing to raise interest rates. The BOE has decided to raise interest rates by 0.25% for three consecutive meetings, and the policy interest rate will be raised to 4.75%. SNB raised the policy interest rate from 1.0% to 1.5% at its March meeting. The statement shows that the financial crisis has been contained, and the perception of a period of interest rate hikes cannot be ruled out. However, the increase of Consumer price index peaked in February (up 3.4% year-on-year) and slowed to 2.2% year-on-year in May. Except for fuel and food, the core CPI fell to 1.9% year-on-year and the central Bank target (0-2%). On the basis of the upcoming meeting held on September 21st, although there is a possibility of raising interest rates at the meeting on September 22nd, the statement on whether it will expand the sense of cessation of raising interest rates will be taken into account.
Since June, the euro has strengthened slightly against the yen from the second half of $1.06 to the second half of $1.07, and from the second half of $148 to the second half of $150. Amidst concerns about the stalling of the eurozone economy, the rebound of the euro lacks strength. However, whether the May decline can return to the eliminated appreciation of the euro is largely due to the price trends against the pound and Swiss franc involved in the policy decisions and guidelines of BOE and SNB.
■ There are potential signs for the pound against Switzerland, but focus on the euro's trend influenced by financial policies in the UK and Switzerland.
At the board meeting of the European Central Bank (ECB) on the 15th, there was a significant margin for a 0.25% increase in the main policy interest rate. The statement made by the Council after May proposed the viewpoint of "judging based on the tone of inflation trends and the strength of financial policy transmission, and evaluating the inflation prospects". The policy of sustained monetary tightening will be upheld in a situation where the fundamental price pressure is deeply rooted. Although the Council will also decide to increase interest rates in July, the statement and the press conference of President Lagarde will lack specific content related to the future policy path in the case of fear of economic stall in the euro area.
European countries Bank of England (BOE) and Swiss National Bank (SNB) will announce policy interest rates on the 22nd. The average wage growth for February to April announced tonight in the UK has accelerated, and it is expected that the real GDP for April will also be demodulated tomorrow. Yesterday, the BOE Financial Policy Committee expressed its difficulty in ending the monetary tightening cycle and continuing to raise interest rates. The BOE has decided to raise interest rates by 0.25% for three consecutive meetings, and the policy interest rate will be raised to 4.75%. SNB raised the policy interest rate from 1.0% to 1.5% at its March meeting. The statement shows that the financial crisis has been contained, and the perception of a period of interest rate hikes cannot be ruled out. However, the increase of Consumer price index peaked in February (up 3.4% year-on-year) and slowed to 2.2% year-on-year in May. Except for fuel and food, the core CPI fell to 1.9% year-on-year and the central Bank target (0-2%). On the basis of the upcoming meeting held on September 21st, although there is a possibility of raising interest rates at the meeting on September 22nd, the statement on whether it will expand the sense of cessation of raising interest rates will be taken into account.
Since June, the euro has strengthened slightly against the yen from the second half of $1.06 to the second half of $1.07, and from the second half of $148 to the second half of $150. Amidst concerns about the stalling of the eurozone economy, the rebound of the euro lacks strength. However, whether the May decline can return to the eliminated appreciation of the euro is largely due to the price trends against the pound and Swiss franc involved in the policy decisions and guidelines of BOE and SNB.