Select Language

EUR/JPY trades around 165.50 after pulling back from three-month highs

Breaking news

EUR/JPY trades around 165.50 after pulling back from three-month highs

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.10.29 13:01
EUR/JPY trades around 165.50 after pulling back from three-month highs

update 2024.10.29 13:01

  • EUR/JPY rises to a three-month high of 166.07 on Monday.
  • The Japanese Yen received downward pressure as the loss of the LDP coalition increased uncertainty regarding the BoJ rate-hike plans.
  • ECB's Pierre Wunsch said that there is no urgency for the central bank to cut interest rates quickly.

EUR/JPY edges lower around 165.50 during the Asian trading hours on Tuesday, following a three-month high of 166.07 reached on Monday. The Japanese Yen (JPY) has been under pressure due to increasing uncertainty regarding the Bank of Japan's (BoJ) rate-hike plans, particularly after Japan's Liberal Democratic Party (LDP)-coalition lost its parliamentary majority.

The Bank of Japan's interest rate decision is set to be the focal point on Thursday, with nearly 86% of economists surveyed by Reuters expecting the central bank to maintain its current rates at the October meeting.

On Tuesday, Japan's Finance Minister Katsunobu Kato stated that he is "closely watching FX movements, including those driven by speculators, with heightened vigilance," but refrained from commenting on specific forex levels. Kato emphasized the importance of stable currency movements that reflect economic fundamentals.

On the Euro's front, policymakers at the European Central Bank (ECB) have expressed differing opinions on monetary policy in recent days. Pierre Wunsch, the Governor of the National Bank of Belgium and a member of the ECB's Governing Council stated on Monday that there is no urgency for the central bank to accelerate interest rate cuts, suggesting it could even tolerate a modest rate.

In contrast, Mario Centeno, Governor of the Bank of Portugal, argued that a 50 basis point rate cut should be considered as a potential option for December. Meanwhile, Governor of the Bank of Italy Fabio Panetta raised concerns about whether the ECB could halt rate cuts once it reaches a neutral level, where monetary policy no longer restricts growth.

Interest rates FAQs

Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.

Higher interest rates generally help strengthen a country's currency as they make it a more attractive place for global investors to park their money.

Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.

The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.


Date

Created

 : 2024.10.29

Update

Last updated

 : 2024.10.29

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

EUR/USD recovers few pips from multi-month low, still deep in the red around mid-1.0700s

The EUR/USD pair comes under intense selling pressure on Wednesday and dives to its lowest level since early July, around the 1.0720-1.0715 region during the Asian session.
New
update2024.11.06 13:30

US Election 2024: Exit polls suggest a nail-biter race; Trump leads in key swing states

Republican nominee Donald Trump is most likely to become the 47th US president, according to the exit polls, as he leads in several major battlegrounds by a minor margin after taking more than 20 reliably red states.
New
update2024.11.06 13:24

Silver Price Forecast: XAG/USD falls due to Trump trade optimism

Silver price depreciates as safe-haven metals face challenges over Trump trade rally.
New
update2024.11.06 13:03

AUD/JPY struggles to find acceptance above 101.00, surrenders intraday gains to one-week top

The AUD/JPY cross attracts follow-through buying for the second successive day on Wednesday and climbs to over a one-week high during the Asian session.
New
update2024.11.06 12:42

USD/INR rises as Trump trades continue to strengthen, Indian Rupee hits record low

The Indian Rupee (INR) attracts some sellers to an all-time low on Wednesday, pressured by a rise in the US Dollar (USD) and weakness in Asian peers after the polls showed Republican candidate Donald Trump ahead of Democratic candidate Kamala Harris in the US presidential election.
New
update2024.11.06 12:29

Gold price remains below $2,750 as USD and bond yields surge on Trump enthusiasm

Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from the $2,725-2,724 area, or a one-and-a-half week low and seesaws between tepid gains/minor losses during the Asian session on Wednesday.
New
update2024.11.06 12:20

GBP/USD depreciates as Trump trade rallies on exit polls favoring the Republican candidate

GBP/USD offers its recent gains registered in the previous session, trading around 1.2940 during the Asian hours on Wednesday.
New
update2024.11.06 12:10

US Election 2024: Wisconsin exit polls show Trump ahead in the presidential race

The conviction of the Republican nominee Donald Trump becoming the 47th US president is growing stronger, according to the early exit polls, as polls closed in most states.
New
update2024.11.06 11:32

EUR/USD faces some selling pressure to near 1.0800 as Trump trades continue to rally

The EUR/USD pair falls to around 1.0805 during the Asian trading hours on Wednesday.
New
update2024.11.06 11:21

US Dollar Index rises above 104.00 due to caution as US election race remains competitive

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, appreciates to near 104.20 during the Asian trading session on Wednesday.
New
update2024.11.06 11:10

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel