Still, I want to approach the dollar’s pullback with a “buy” stance (updated 2021.09.10)
In Japan’s only FX magazine, the popular series that ran over 130 episodes, “The Future of the Foreign Exchange Market,” we will continue to have insights from economic analyst Tomotaro Tajima about how the markets, which are moving daily, are likely to move in the future.
Tomotaro Tajima Profile
Tomotaro Tajima. Economic analyst. President and CEO of Alfinauts. Born in Tokyo in 1964. After graduating from Keio University, he moved on from Mitsubishi UFJ Securities and has since analyzed and researched a wide range from finance and economics to strategic corporate management, and even individual asset formation and fund management. He serves as a lecturer for lectures, seminars, and training organized by private companies, financial institutions, newspapers, local governments, and various business associations, with about 150 lectures per year. He has written many serialized works and comments in print media, including Weekly Gendai “Rules of Net Trading” and Examina “Money Maestro Training Course.” He has also contributed columns on stocks and forex to numerous websites, earning a high reputation as a stock and FX strategist. He has also written for the Home Economics section of Bungei Shunjū’s “Basic Knowledge of Contemporary Terms.” After regular appearances on television (TV Asahi “Yaji-uma Plus,” BS Asahi “Sunday Online”) and radio (MBS “Might’s Asai-chi Radio”), he currently serves as a regular commentator on Nippon Keizai Shimbun's CNBC “Market Wrap” and Daiwa Securities Information TV “Economy Marche.” His major DVDs include “Super Easy: Tomotaro Tajima’s FX Introduction” and “Super Easy: Tomotaro Tajima’s FX Practical Technical Analysis.” His major books include “Wealth Reconsideration Manual” (Parse Publishing), “FX Chart ‘Formula for Profit’” (Alchemix), and “Why Can FX Make You Asset-rich?” (Texts), among many others. His latest book is “Profits Riding the Rising U.S. Economy” (Jiyu Kokuminsha).
Table of Contents
- After the ECB’s regular policy meeting and President’s press conference, the market reacts with euro selling
- On reducing the pace of PEPP purchases
- Eurodollar, dollar-yen outlook
Body of the article: 1,486 characters (paid portion: 821 characters)
After the ECB’s regular policy meeting and President’s press conference, the market reacts with euro selling
Yesterday (the 9th), the market’s attention was greatly focused on the European Central Bank’s (ECB) regular policy meeting and President Lagarde’s press conference, and the market ultimately reacted with euro selling.
At the meeting, although there was a plan to gradually slow the pace of bond purchases under the Pandemic Emergency Purchase Programme (PEPP), the overall impression was one of a “very cautious stance,” leading to a negative euro reaction overall.
There may have been a market reaction to Lagarde’s remark that “the slowdown in the PEPP pace is not tapering but a minor adjustment.” However, more significant was the perceived gap between “several ECB members’ forward-looking statements in late August to early September about shrinking PEPP” and the decisions and president’s remarks at this meeting.
On reducing the pace of PEPP purchases
Of course, regarding reducing the pace of PEPP purchases, it may already have been priced in as the euro/dollar moved back toward the 1.19 level by September 3. Moreover, it goes without saying that PEPP is an “emergency” response, and its scale will eventually be reduced in stages. In the first place, the purchase pace had been quite rapid since March of this year. Lagarde’s statement that “this is a minor adjustment” means simply returning to the previous pace.
Of course, what is also significant is the difficulty in predicting the spread of the Delta variant, which matters for both the euro area and countries such as the United States and Australia. In fact, this week on the 7th,——
