The yen recovered from its fresh 10-month low against the US Dollar as Masato Kando, one of Japan’s most important currency officials, signalled a potential intervention to the currency if it continues to weaken. USD/JPY fell 0.2% to trade near 147 and AUD/USD starts to pare its fall, currently at 0.6395. EUR/USD recovers from yesterday’s low of 1.0710 and sits a pinch higher around 1.0740. GBP/USD also edged back up from yesterday’s 1.2528 low, and currently trades mid 1.25-1.26 at 1.2580.
Data and events to look out for today in the common region will be Eurozone retail sales, Germany factory orders. In the UK, the nation’s construction PMI is due today and BOE’s Governor Andrew Bailey is also due to speak later today at the UK parliament’s Treasury Select Committee.
ECB’s Joachim Nagel, Bundesbank President, stated that speculation that cuts will follow the central bank’s borrowing costs peak are misguided and not right. Nagel spoke 2 days before the rest of the Governing council members go into the quiet period ahead of the 14th of September meeting, where he did not suggest whether he favours a 10th consecutive hike or a hold in rates. Note that the ECB has a very data-dependent approach and although there has been good progress, Nagel stated that “We are still a long way from reaching our inflation target”.
