2024-02-23
EBC Forex Snapshot, 23 Feb 2024
The yen headed for a fourth weekly drop against the dollar on Friday as investors chased higher yields. It has been the worst performing G10 currency this year as less rate cuts are now priced in elsewhere.
Goldman Sachs no longer expects a Fed’s interest rate cut in May and see four 25-bp cuts this year after Governor Christopher Waller said he need to see a few more months of data to affirm price stability.
Positioning data shows yen shorts jumped last week. At the two-year tenor, the gap in yield between Japanese and US government bonds is more than 450 bps, which prompts carry trades funded by the currency.
| Citi (as of 5 Feb) | HSBC (as of 23 Feb) | |||
| support | resistance | support | resistance | |
| EUR/USD | 1.0724 | 1.1139 | 1.0715 | 1.0910 |
| GBP/USD | 1.2487 | 1.2827 | 1.2554 | 1.2736 |
| USD/CHF | 0.8333 | 0.8728 | 0.8696 | 0.8895 |
| AUD/USD | 0.6500 | 0.6900 | 0.6464 | 0.6618 |
| USD/CAD | 1.3379 | 1.3552 | 1.3399 | 1.3574 |
| USD/JPY | 146.09 | 148.80 | 148.46 | 151.72 |
The green numbers in the table indicate that the data has increased compared with the previous time; the red numbers indicate that the data has decreased compared with the previous time; and the black numbers indicate that the data has remained unchanged.
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