Currency market movements were mostly muted overnight, following a dramatic day that saw the Japanese yen rally more than 4.0%.
Overview
American equity futures ticked higher for the second straight day after falling during the previous four sessions. The slight risk-on sentiment has not dinged the dollar too much, as the Bloomberg Spot Dollar Index is mostly unchanged.Later, existing home sales and consumer confidence will be released at 10 a.m.Ukraine President Zelenskiy arrives in DC today and will address Congress. It is expected that U.S. President Joe Biden will unveil a large assistance program to Ukraine, including Patriot missiles. President Biden and Zelenskiy will make a joint statement at 4:30 p.m.US GDP and jobless claims are due out tomorrow, followed by a slew of data on Friday, including Durable goods and PCE deflator inflation numbers. Monex USA will close at 3 p.m. EST on Friday ahead of the long holiday weekend. All markets are also closed on Monday, December 26th.
What to Watch Today…
- No major economic events are scheduled for today
- Holiday Hours: Dec 23, Dec 30: 8:30a to 3p EST; Dec 26, Jan 2: CLOSED
- Monex USA Online is always open
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EUR ⇑
The Euro has eked out small gains against the U.S. dollar overnight. But the EUR/USD pair remains largely unchanged this week as the Euro’s recent run against the greenback has lost momentum. However, the Euro has continued to gain against the British pound, rising to its highest level since mid-November. This move is likely more a result of sterling weakness than Euro strength. A report from earlier today showed that U.K. government borrowing surged in November. The U.K.’s budget deficit stood at 22 billion GBP, the highest monthly total since at least 1993.
JPY ⇑
After more volatility overnight, the Japanese yen is unchanged to start the day. Yesterday, the Japanese yen posted its biggest single-day rally since 1998. The Bank of Japan surprised nearly everyone and indicated a hawkish shift could be in the cards in 2023. Market moves were swift and sent the Japanese yen rallying over 4.0% against the greenback in the hours after the announcement.
We cannot let this morning’s relative calm fool us, as more volatility is likely, especially as trading conditions thin ahead of the Christmas holiday.
