Dollar/yen is expected to struggle in European and US markets on the 24th, with expectations of further US rate hikes and caution over coordinated Japan-US intervention both cited as market drivers. Euro/dollar has fallen from around 1.14, while dollar/yen has moved into a range of approximately ¥157.7–¥158.4. Attention remains focused on interest-rate trends and the prospect of intervention.
In European and US foreign exchange markets on the 24th, dollar/yen was seen as likely to struggle to advance. Further US monetary tightening is being priced in, and market conditions are expected to remain conducive to higher US interest rates and a stronger dollar, but caution over coordinated Japan-US intervention is expected to contain further dollar gains and yen weakness. The previous day's US PMI showed both manufacturing and services performing unexpectedly strongly, and some views also highlighted the widening divergence from the euro area. Dollar/yen rose from the ¥157.70 level to the ¥158.40 level, while euro/dollar softened from around $1.14 to the $1.1370 level.
In overseas markets later today, attention will focus on US monetary policy and developments in the Middle East. With further action by the Federal Reserve expected, some views point to the possibility that dollar buying will lead the market if long-term interest rates rise. On the other hand, US initial jobless claims due tonight are expected to be weak, which could temporarily slow dollar buying based on expectations of a restrictive policy stance. In the Middle East, uncertainty over Iranian President Pezeshkian's willingness to engage in dialogue with the United States and his policy on the country's nuclear development program was also cited, with some views suggesting that this could cap the dollar's upside. Caution over coordinated Japan-US intervention remains strong, and currency market activity is expected to remain limited.
Today's European and US market calendar includes Germany's IFO business climate index (September), the US current account (April–June), US initial jobless claims, Canadian retail sales (July) and US new home sales (August). These releases could affect short-term market reactions.