Global Market Snapshot 30th September 2024

This week, the forex market experienced significant volatility, with various major currency pairs showing different performances. The U.S. dollar weakened due to inflation data falling short of expectations, while the Japanese yen rebounded strongly influenced by Japan’s political situation. Meanwhile, the pound, euro, and Canadian dollar were each affected by their respective countries’ economic data and events, creating a mixed situation of both bullish and bearish trends.

USD: Inflation Pressure Eases, Declines for Fourth Consecutive Week

This week, the U.S. dollar showed weakness, with the Dollar Index dropping around 0.2%, marking its fourth consecutive weekly decline. The latest August Personal Consumption Expenditures (PCE) price index in the U.S. rose 2.2% year-over-year, down from 2.5% in July, indicating that inflationary pressures have eased. On a month-over-month basis, August PCE rose 0.1%, meeting market expectations, while July’s increase was confirmed at 0.2%.

Additionally, U.S. consumer spending grew 0.2% in August compared to the previous month. Although slightly below expectations, it indicates that the economy continued to grow in the third quarter. These data suggest that while the U.S. economy is slowing down, it remains resilient. Expectations for a rate cut by the Federal Reserve in November have further increased in the market.

USDJPY: Shigeru Ishiba’s Election Victory Boosts Yen’s Strong Rebound

This week, the yen became a highlight in the forex market, rising sharply by 1.88% against the U.S. dollar to 142.12 yen. The USD/JPY pair dropped by 1.25%, marking its third decline in four weeks. Shigeru Ishiba narrowly won the leadership election of Japan’s Liberal Democratic Party, and the market welcomed his policy stance. Ishiba supports the Bank of Japan’s rate hike policy and has stated that the current rate hike path is appropriate.

Previously, the market had widely expected Sanae Takaichi to win, and her strong opposition to further rate hikes had fueled expectations of a weakening yen. However, Ishiba’s victory reversed this sentiment, leading to a stronger yen.

EURUSD The euro fell by 0.14% against the U.S. dollar to 1.116 USD, showing a slight decline despite limited volatility. The euro also dropped by 1.95% against the yen, reaching 158.67 yen. Economic data from Europe indicated that inflation rates in France and Spain were lower than expected, which led to the market raising the probability of a European Central Bank rate cut in October to over 90%.

Although the overall performance of the euro remained relatively stable, discussions about the future direction of ECB monetary policy are heating up, and the euro may continue to be influenced by policy expectations in the future.

GBPUSD The pound fell by 0.3% against the U.S. dollar this week, ending at 1.3375 USD, but posted a cumulative weekly gain of over 0.4%, continuing the upward momentum from last week. Although the pound’s uptrend has slowed, its performance still outpaced other major currencies due to relatively optimistic UK economic data, particularly in consumer spending and the labor market. Some analysts believe that the pound’s upward momentum may continue, especially as the Bank of England has not explicitly eased its monetary policy.

USDCAD The Canadian dollar experienced significant fluctuations this week, largely influenced by oil price movements. Although the overall rise in oil prices provided support for the Canadian dollar, mixed expectations regarding the Bank of Canada’s policy led to increased volatility in the currency’s performance.

BTC Bitcoin remained on an uptrend, marking an intraday high of $66,550.