In turn of other central banks, the dollar yen starts to rise again

Key points of the article:

• Profit taking on the dollar after a Fed in line with investors’ expectations
• The dollar yen regains positive momentum

Currency Table-Time Horizon: Daily

Profit taking on the dollar after a Fed in line with investors’ expectations

The dollar is taking some profit taking after the US Federal Reserve said it would end bond purchases put in place to fight the pandemic in March, with investors awaiting impending decisions from other major central banks.

“The economy no longer needs increasing amounts of monetary support,” said Mr Powell, contrasting the near-depressive conditions at the start of the coronavirus pandemic in 2020 with the rise in prices and wages today. ‘hui and the rapid improvement of the labor market.

Obviously, the Fed has met the expectations of investors who have unwound certain positions. The markets even expected an even more restrictive message.

Market traders are now awaiting meetings of the European Central Bank, Bank of England, Norway, Swiss National Bank today and Japan tomorrow before firming their positions.

The pound and the euro are up this morning. These two central banks could surprise with a firmer speech on their monetary policy.

ECB officials must end the emergency pandemic purchase program, the PEPP, but investors will be looking to see how the six-year-old asset purchase program might take the edge off. relay, although the prospect of a rate hike is still remote.

The BOE will attempt to both contain inflation and respond to the concerns of an economy already concerned about the rapidly spreading omicron variant of Covid-19. Data on Wednesday showed UK inflation soared to 5.1% in November, its highest level in more than a decade, the same day the country recorded the highest number of daily cases of coronavirus since the start of the pandemic.

Elsewhere, the Australian dollar edged up slightly after jobs data was well above expectations, which seems more important to markets than the fact that the US central bank said rates were unlikely to rise. interest must be raised in 2022.

The dollar yen regains positive momentum

The dollar yen broke through resistance at 114.00 yesterday which framed a consolidation phase for several sessions with a low of 112.70. The 13 and 34 period moving averages intersect and turn higher. The pair could therefore move towards the resistance corresponding to the November high and the March 2017 high at 115.50.

A return below intermediate support at 113.22 would invalidate this positive scenario and expose the support at 112.70.

Evolution of the dollar against the yen in daily data:

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