USD/JPY nears 20-year peak

“I never dreamed about success. I worked for it.” – Estée Lauder 

 

 

HEADLINES

 

 

• U.S. dollar climbs to near 20-year peak vs yen as more Fed hikes loom 
• Gold scales 1-month peak as inflation angst bolsters appeal
• Oil prices up over 3% despite big U.S. crude stock build
• Stocks rise as earnings reporting season kicks off, Nasdaq up 1.5%
• EUR/USD to extend its decline on unchanged guidance from the ECB – Scotiabank
• GBPJPY Near Term: Upside favored

 

 

FOREX

 

 

U.S. dollar climbs to near 20-year peak vs yen as more Fed hikes loom 

 

The U.S. dollar soared to a nearly 20-year high against a sluggish yen on Wednesday, as aggressive tightening from the Federal Reserve contrasted sharply with the Bank of Japan’s ultra-loose monetary policy. 

Bank of Japan Governor Haruhiko Kuroda on Wednesday said that the recent rise in inflation driven by higher import costs could hurt the economy, stressing the central bank’s resolve to keep monetary policy ultra loose.

 

Bank of Canada lifts rates, promises more hikes to fight inflation

 

The Bank of Canada on Wednesday raised interest rates by half a percentage point - its biggest single move in more than two decades - and promised more hikes to fight soaring inflation that is being driven in part by the war in Ukraine.

The central bank raised its benchmark overnight rate to 1% from 0.5%. It also said it would allow government bonds it amassed during the COVID-19 pandemic to roll off as they mature from April 25, beginning what is known as quantitative tightening.

 

 

COMMODITIES

 

 

Gold scales 1-month peak as inflation angst bolsters appeal 

 

Gold prices hit a one-month high on Wednesday, driven by demand for a hedge against soaring inflation amid the Russia-Ukraine war, easing pressure from expectations of an aggressive U.S. interest rate hike and a robust dollar. 

Gold is considered a hedge against inflation and geopolitical risks. However, rising U.S. interest rates would raise the opportunity cost of holding non-yielding bullion and boost the greenback in which it is priced.

 

Oil prices up over 3% despite big U.S. crude stock build 

 

Oil prices rose on Wednesday as investors grew more discouraged about peace talks between Russia and Ukraine, feeding worries about tight supplies even after U.S. crude stocks rose by more than 9 million barrels in the most recent week.

U.S. production is expected to keep rising from 11.8 million bpd now to about 12 million in 2022. Exports of refined products reached an all-time record, as heavy overseas demand caused U.S. stockpiles to fall.

 

 

STOCKS

 

 

Stocks rise as earnings reporting season kicks off, Nasdaq up 1.5% 

 

Stocks rose on Wednesday as the corporate earnings season kicked off with mostly positive results, and traders looked past surging inflation numbers. 

Analysts in general have tempered expectations for the season amid rising commodity costs, the war in Ukraine and the lingering pandemic. Earnings for S&P 500 companies are expected to increase just 4.5% in the period, the lowest growth since the fourth quarter of the pandemic-plagued 2020, according to FactSet.

 

 

ANALYSIS

 

 

EUR/USD to extend its decline on unchanged guidance from the ECB – Scotiabank 

 

“With three weeks until the Fed’s May meeting where it will likely roll out a 50bps hike, unchanged guidance from the ECB tomorrow will result in a continued risk of EUR losses over the coming days particularly ahead of the second round of French presidential elections on the 24th.”

“Early runoff polls show Macron defeating Le Pen 54% to 46% according to Opinionway and 52.5% vs 47.5% according to Ifop, but momentum can quickly change until the vote; particularly following the televised debate on the 20th.” 

 

 

CHART

 

 

GBPJPY Near Term: Upside favored

Technical View: Long position above 163.75. Target 164.7. Conversely, break below 163.75, to open 163.35.

Comments: The pair breaks above the resistance.

Source: Trading Central
 

 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

SOURCES

https://www.cnbc.com/2022/04/13/forex-markets-euro-reserve-bank-of-new-zealand-dollar.html
https://www.cnbc.com/2022/04/13/gold-markets-russia-ukraine-war-dollar.html
https://www.cnbc.com/2022/04/13/oil-markets-china-and-japan-economic-data.html
https://www.cnbc.com/2022/04/12/stock-market-futures-open-to-close-news.html
https://www.fxstreet.com/news/eur-usd-to-extend-its-decline-on-unchanged-guidance-from-the-ecb-scotiabank-202204131321
https://www.reuters.com/business/finance/bank-canada-set-play-catch-up-with-rare-50-bps-rate-hike-2022-04-13/