The USD was stable in the first session of the week of November 24, as investors were wary of the possibility of Japan intervening in exchange rates to save the weakening Yen. At the same time, Europe and the Atlantic are preparing to welcome a series of economic data and interest rate decisions that could shape global currency trends.
The holiday in Tokyo has caused liquidity to decrease, the Yen is moving sideways around 156.53 Yen/USD, while investors are concerned about the increasing risk of Tokyo intervening in foreign exchange.
The Yen has depreciated strongly due to prolonged low interest rates and loose fiscal policy, but recovered slightly last weekend after Finance Minister Satsuki Katayama increased warnings about the possibility of Japan buying the Yen to prevent price decline.
According to traders, the 158162 Yen/USD range is being considered a potential intervention threshold.
We do not rule out the possibility of Tokyo launching the hand as early as Friday, within the London or New York trading hours, if the exchange rate approaches 160 Yen/USD. thin liquidity could cause fluctuations to drop significantly if intervention occurs, said Frances Cheung and Christopher Wong of OCBC.
Mr. Takuji Aida, a private sector member of the Japan Economic and Financial Advisory Council, told NHK that Japan can proactively intervene in the foreign exchange market to minimize the negative impact of the weak Yen on the economy.
In Europe, the euro is moving sideways at $1.1520 a month, although expectations of a December rate cut by the Fed are rising after New York Fed President John Williams said that there is still room for a short-term rate cut.
The euro also did not react strongly to the news that Ukraine and the US announced an updated and adjusted peace framework from the 28-point plan last week.
USD Index Stabilized around 100.15 points, showing cautious sentiment covering the currency market.
Meanwhile, the British pound (GBP) is trading at 1.3097 USD, as investors await the new UK budget presented by Finance Minister Rachel Reeves next Wednesday. Reeves is expected to balance growth-stimulating spending and a commitment to fiscal discipline to reassure the bond market.
Investors are almost certain that the Reserve Bank of New Zealand (RBNZ) will cut interest rates by 0.25 percentage points at this week's policy meeting, but are still wondering about the possibility of another cut next year.
The New Year's Dollar (NZD) has held around $0.5609, despite falling nearly 8% since July, due to weak economic outlook and expectations of a policy easing by RBNZ.
The Australian Dollar (AUD) is also stable at $0.6460, as the market awaits Australia's first monthly consumer price index (CPI) report.
According to a Reuters survey, the average annual CPI is forecast to remain around 3.6%.
This result, in our view, could strengthen the view that the Reserve Bank of Australia (RBA) will not continue to cut interest rates in the current cycle, said Peter Dragicevich, currency strategist for the Asia-Pacific region of Corpay.
Meanwhile, the cryptocurrency market was slightly stable at the end of the week, but Bitcoin fell back 1.5% in the Asian session, falling back to around $86,700, when selling pressure reappeared.
