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USD/JPY Uptrend Accelerates as Greenback Resumes March Higher

FOREX
  • USD/JPY has broken to fresh cycle highs early Thursday, with the price action not only breaking through yesterday's high, but accelerating the rally to open next resistance at 139.48 (the 1.00 proj of the Jun 16 - 22 - 23) ahead of the psychological 140.00 level.
  • The resumption of risk-off trade in global equity markets has fueled appetite for the greenback, particularly in light of Wednesday's CPI release which has made the prospect of a 100bps hike from the Fed a tangible option going forward. Both Mester and Bostic have spoken since the inflation release, with each member issuing concern over hot CPI and stating that all options - including a 100bps rate move - are on the table.
  • This puts the greenback above all others in G10 ahead of the NY crossover, putting the USD Index at new multi-decade highs.
  • Outside of the USD and JPY, CAD and NZD also trade poorly despite the Bank of Canada's larger than expected rate hike yesterday. Commodity-tied currencies are trading soft inline with base metals and energy products, as broader concerns about a global recession swirl further as we head through the first few weeks of H2.
  • Focus turns to US PPI data later today, to confirm whether pipeline inflation is as hot as the price pressures facing the consumer. Weekly jobless claims are also on the docket alongside a speech from Fed's Waller.
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