Yen plunges driving dollar/yen sharply higher
As a new week begins, the yen continues to plunge, pushed lower by a comeback in Asian stocks despite a rise in Japanese yields. Indeed, the 10-year JGB yield, which is currently at 0.093%, is on its way to 0.1%. The pound is currently the strongest, thanks to hawkish statements from Bank of England officials over the weekend. The Australian Dollar is closely following, and it is leading other commodity currencies higher as well. The US dollar index is weakening, while dollar/yen surged to a fresh 34-month high above 113.00. The euro is holding near $1.1560, and US futures are suggesting a negative open.
BoE may raise interest rates soon
Officials from the Bank of England hinted that interest rates may be raised soon to combat inflation. Governor Andrew Bailey warned of a “very harmful” period of inflation unless policymakers act, while Michael Saunders said that traders were correct to push forward bets on rises. Markets are nearly entirely pricing in the first shift by the end of the year — the next monetary policy announcement is scheduled for November 4. Pound/dollar is holding above 1.3600, remaining in a bullish correction since September 30.
The UK’s Brexit minister will seek revisions to the protocol that oversees trade flows with Ireland this week, setting up a potential clash between Britain and the EU on Northern Ireland. It comes as the government grapples with other issues such as rising energy prices and a fishing rights conflict with France. During the fishing dispute, France is threatening to cut the power supply of Britain’s Channel Islands.
WTI crude oil advances to new 7-year high; gold holds firm
For the first time since 2014, WTI crude oil futures have surpassed the psychological level of $82/per barrel. Oil has benefited from rising natural gas prices and falling stocks as the northern hemisphere prepares for winter. Gold prices are still underneath the 20-day SMA, which is acting as strong resistance over the last sessions, remaining in a trading range of $1,723-$1,834/per ounce in the broader outlook.olds ground
