Pound falls on BOE decision, then rebounds on dollar weakness
Intraday flow dollar index Source: Yonhap Infomax.
(Seoul = Yonhap Infomax) Reporter Kim Seong-jin = The value of the US dollar turned down after 4 trading days.
Signs of a weakening job market in the US weekly unemployment insurance data weighed heavily on the dollar from the start of the session. The further decline in US Treasury yields after the favorable results of the 30-year US Treasury bond offering also contributed to the weakening dollar.
The pound appeared to be lagging behind dovish signals from the Bank of England (BOE), England’s central bank, but rebounded as the dollar showed weakness.
According to Yonhap Infomax (screen no. 6411), as of 4 pm on the 9th (hereinafter referred to as Eastern time), the dollar-yen exchange rate in the New York foreign exchange market was 155.433 yen, down 0.205 yen ( 0.132%) of the previous day’s New York market closing price of 155.638 yen.
The dollar-yen rose to 155.952 yen in European trading and then declined gradually.
The Euro-Dollar exchange rate was $1.07826, up $0.00373 (0.347%) from the previous price of $1.07453. Euro-dollar rose for the first time in three trading days.
The Euro-Yen exchange rate was 167.59 yen, up 0.360 yen (0.214%) from the previous price of 167.23 yen. The upward trend continued for four days.
The dollar index, which reflects the value of the dollar against the six major currencies, recorded 105.221, down 0.327 points (0.310%) from the previous record of 105.548.
The dollar index rose above the 105.7 mark early in the morning in New York, but fell immediately when the weekly unemployment insurance data came out.
According to the US Department of Labor, the number of new unemployment insurance claimants for the week ending on the 4th was a seasonally adjusted 231,000, an increase of 22,000 from the previous week.
This is a result that exceeded the market expectation of 214,000 people and is the highest number in 9 months since August last year. The previous week’s figure was revised up by 1,000 from 208,000 to 209,000.
As the 30-year note bidding results came out in the afternoon, the dollar index extended its decline and broke through the 105.3 line.
According to FedWatch from the Chicago Mercantile Exchange (CME), the Federal Funds Rate (FFR) futures market priced the probability that interest rates would be frozen until September at 32.1% in the late afternoon session in New York. It was 2.2% points lower than the battlefield.
The pound-dollar price fell as low as $1.24460 during European trading, but turned up in New York trading. The pound-dollar price rose 0.209% from the previous day to $1.25229.
On this day, the BOE suggested that it could start cutting interest rates as early as June.
BOE Governor Andrew Bailey said in a press conference after freezing the policy rate at 5.25% at the monetary policy meeting that a rate cut in June “was not ruled out or a fait accompli.”
“Before the June meeting, we will have two complete data sets on inflation, (economic) activity and the labor market, which will help us make new decisions,” he said.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said in a report that the BOE had “adjusted its guidance to indicate that data available over the next two months could make a difference” and suggested a June cut was the most likely outcome .
sjkim@yna.co.kr
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This article was published at 05:44 on the Infomax financial information terminal.
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