Exchange rate outlook (USD, EUR)
2023-11-24
■ US Dollar>> US dollar/Japanese yen shows a downward trend.
■ EUR>> The euro is expected to experience a pullback last week.
Last week, the US dollar/yen fell. Due to the University of Michigan survey released over the weekend, consumer expectations for inflation have risen, and the US dollar/yen has hit a new high since the beginning of the year, approaching 152 yen. However, the increase in the composite index of the US Consumer Price Index (CPI) and the core index excluding food/energy slowed down in October, leading to a decrease in expectations of a US dollar interest rate hike. Although concerns about global economic growth intensified, the US dollar selling accelerated due to the downward trend of US bond yields. In this situation, concerns about the global economic slowdown have deepened, and yen buying and repurchase momentum has been rapid. The US dollar/yen has fallen to the first half of the 149-yen range, reaching a new low in two weeks.
Last week, several members of the Federal Reserve (FOMC) stated that despite uncertainty about the economy and prospects, they will maintain their current monetary tightening policy in order to achieve inflation targets within a reasonable time frame. In the atmosphere of stagnant interest rate hikes in the United States, the market is paying attention to FOMC meeting minutes (October 31, November 1) and statements from financial authorities, but the market has already reflected the trend of starting interest rate cuts in May 2024. It is expected that the US Manufacturing Purchasing Managers' Index (PMI) will decrease by 0.2 percentage points in November compared to the previous month, and it is expected to once again fall below the good or bad line of 50. Despite the obstruction of action on the US dollar/yen, it will remain stable near the level of 148 yen and 79 yen due to the awareness of the Japanese-US interest rate difference.
The euro rose last week. Due to the weakening of the US dollar and the buying of the euro as a result of the US price index, last week's rise in the euro was mainly influenced by the US dollar and the Japanese yen. Over the weekend, major credit rating agencies in the United States raised their outlook for Italy, among other reasons. The euro remained strong and optimistic that the US dollar had risen to the first half of the $1.09 range since August this year. For the Japanese yen, although it has risen to the first half of the 164-yen range since August 2008, there has been a downward trend at that level and it has remained stable in the first half of the 162-yen range.
Japan and the United States have a holiday in the second half of this week, which is expected to lead the correction against last week's rise in the euro. In terms of the eurozone economy, in addition to last week's German economic indicators, the European Commission has stated that economic growth will resume between October and December of this year, and excessive opacity will be reduced. However, compared to the Japanese and American economies, the improvement momentum is not significant. In addition, in terms of financial policy, senior officials from the European Central Bank (ECB) generally support maintaining the current policy interest rate level. It is difficult to find a clear sense of direction in the bullish news of the eurozone. Pay attention to the fluctuations of the euro/dollar around the 100-day moving average ($1.0790) and the euro/yen around the 13-day low (161-yen 53 yen).
■ EUR>> The euro is expected to experience a pullback last week.
Last week, the US dollar/yen fell. Due to the University of Michigan survey released over the weekend, consumer expectations for inflation have risen, and the US dollar/yen has hit a new high since the beginning of the year, approaching 152 yen. However, the increase in the composite index of the US Consumer Price Index (CPI) and the core index excluding food/energy slowed down in October, leading to a decrease in expectations of a US dollar interest rate hike. Although concerns about global economic growth intensified, the US dollar selling accelerated due to the downward trend of US bond yields. In this situation, concerns about the global economic slowdown have deepened, and yen buying and repurchase momentum has been rapid. The US dollar/yen has fallen to the first half of the 149-yen range, reaching a new low in two weeks.
Last week, several members of the Federal Reserve (FOMC) stated that despite uncertainty about the economy and prospects, they will maintain their current monetary tightening policy in order to achieve inflation targets within a reasonable time frame. In the atmosphere of stagnant interest rate hikes in the United States, the market is paying attention to FOMC meeting minutes (October 31, November 1) and statements from financial authorities, but the market has already reflected the trend of starting interest rate cuts in May 2024. It is expected that the US Manufacturing Purchasing Managers' Index (PMI) will decrease by 0.2 percentage points in November compared to the previous month, and it is expected to once again fall below the good or bad line of 50. Despite the obstruction of action on the US dollar/yen, it will remain stable near the level of 148 yen and 79 yen due to the awareness of the Japanese-US interest rate difference.
The euro rose last week. Due to the weakening of the US dollar and the buying of the euro as a result of the US price index, last week's rise in the euro was mainly influenced by the US dollar and the Japanese yen. Over the weekend, major credit rating agencies in the United States raised their outlook for Italy, among other reasons. The euro remained strong and optimistic that the US dollar had risen to the first half of the $1.09 range since August this year. For the Japanese yen, although it has risen to the first half of the 164-yen range since August 2008, there has been a downward trend at that level and it has remained stable in the first half of the 162-yen range.
Japan and the United States have a holiday in the second half of this week, which is expected to lead the correction against last week's rise in the euro. In terms of the eurozone economy, in addition to last week's German economic indicators, the European Commission has stated that economic growth will resume between October and December of this year, and excessive opacity will be reduced. However, compared to the Japanese and American economies, the improvement momentum is not significant. In addition, in terms of financial policy, senior officials from the European Central Bank (ECB) generally support maintaining the current policy interest rate level. It is difficult to find a clear sense of direction in the bullish news of the eurozone. Pay attention to the fluctuations of the euro/dollar around the 100-day moving average ($1.0790) and the euro/yen around the 13-day low (161-yen 53 yen).