Dollar-Yen Year-to-Date High Update, Euro-Dollar at Risk of Break Below Support!? – Highlights and Schedule for February 12
Yesterday, with Japan on a three-day holiday and markets closed, Franks experienced a sharp fluctuation to start the session amid rough trading. After that, when Chinese investors returned after the long holiday, Chinese stocks rose significantly. Whether it was a risk-off unwind or not, the dollar/yen rose to intraday highs for the year as the stop-loss dynamics pulled it up.
There were times when the yen was sold, but the dollar was bought as well, which seems to have supported the rise in USD/JPY.
◎ Today’s Points of Attention
1) US-China Trade Talks
This week’s main focus has attracted a lot of media coverage, but detailed developments have yet to emerge. It may be that progress is limited. Since talks between the US and China are also taking place today, if reports indicate a breakdown or stalemate, risk-off sentiment could prevail; if reports indicate progress or agreement, the unwind of risk-off could begin.
US-China relations could become a global driver of risk-off. As a result, it could become a factor that leads to dollar-only buying. For more on dollar-buying, please refer to below.
2) Speeches by Leaders
Today, rather than economic indicators, speeches by prominent figures are expected to be numerous and are attracting attention. Notably, remarks by Lael Brainard, President of the Federal Reserve Bank of San Francisco, are awaited. After Jerome Powell’s term, it appears Brainard may be nominated for the role of head of the Federal Reserve of Ireland. Although said to be dovish, it remains to be seen whether she will maintain a dovish stance if her position changes. In particular, the euro area is worried about a recession, so an increase in dovish board members could delay tightening measures and lead to euro selling.
Additionally, Powell’s comments at the Fed can change frequently. Last time, his remarks were dovish; this time, will they remain dovish or shift to hawkish?
3) U.S. Budget
This weekend, the provisional budget deadline is the 15th. If a budget agreement is not reached by the 15th, the government could shut down again. A government shutdown would delay some economic data releases and have broader economic impacts.
Also, the 15th is the date of US debt maturity and interest payments, which adds extra attention to the budget debate.
◎ Today’s Economic Calendar
February 12 (Tuesday)
EU Finance Ministers’ Meeting
US-China Trade Talks
09:30 AUD Housing Lending, Housing Investment, NAB Business Confidence Index
12:30 EURLael Brainard, President of the European Central Bank (ECB) Governing Council
17:00 EUR Weidmann, President of the German Bundesbank >
18:00 EUR Nowotny, President of the Austrian Central Bank
20:00 USD OPEC Monthly Report
22:00 GBPCarney, Governor of the Bank of England
February 13 (Wednesday)
02:45 USDPowell, Chairman of the Federal Reserve
08:30 USD Mester, President of the Cleveland Fed
08:30 AUD Westpac Consumer Confidence Index
09:30 USD George, President of the Federal Reserve Bank of Kansas City
10:00 NZDRBNZ Interest Rate Decision
11:00 NZDOAN RBNZ Governor's Press Conference
