Just on Thursday, the foreign exchange market experienced extreme volatility. The GBP/USD pair fell to seven-week lows as the Greenback skyrocketed. After the GBP/USD pair rebounded toward the 1.3320 region, analysts were forced to watch and adapt as the rapidly changing economic landscape. By the end of the day, all eyes are on the next Japanese eco data. Of all the Tokyo Inflation Rate Forecast announcements, this one is most widely watched.
During the Asian session, USD/JPY exchange rate remained bullish, extending its Wednesday advances and rising towards 8-week highs. It got close to the strong resistance level of 150.00. This led to an increased risk of intervention by the Bank of Japan (BoJ), raising the risk among traders. Later today, from BoJ, Noguchi is scheduled to speak. Expectations are high that this address will elucidate clarity on the direction of future monetary policy and what that means for the yen.
A new wave of economic indicators are set to hit the streets, further complicating the market’s calculus. Weekly Foreign Bond Investment readings are expected, offering a window into global investor sentiment and hot money capital flows. These figures, combined with the continuing inflation data coming out of Tokyo, may have major ramifications on currency valuations.
At the same time, the EUR/USD cross took another step back to three-week lows, treading around the 1.1650 area. The increase reveals an undeniable link to larger market movements. Factors such as changing investor sentiment towards the euro and other macroeconomic conditions are severely affecting its valuation. The AUD/USD pair has pulled back for the third day in a row. This dramatic reversal points to surging bearish sentiment against the Australian dollar.
American WTI prices skyrocketed for the fourth consecutive day. They did go a little bit above the $65.00 threshold price per barrel. As you may know, oil prices have skyrocketed in recent weeks. This increase is even more notable given the ongoing supply constraints and geopolitical turmoil that continue to roil global energy markets.
As traders and market participants continue digesting these developments, volatility in the various currency pairs should remain pretty prominent throughout the day today. Market responses after Tokyo publishes its inflation figures will be vital, analysts insist. In addition, they need to be sensitive to further comments from BoJ officials.