Indeed, the Buck lost the ground it had gained yesterday. A big swing has occurred to close the month with the Buck last night hitting its strongest levels since April 8th, but this morning dropping to its weakest in the last 10 days.

After the Fed’s “hawkish” announcement and press conference, the last presided by Jerome Powell, it was clear that inflation has become a priority concern for officials. This naturally boosted USD against all peers and triggered a level for Japanese Yen that forced financial authorities to address the depreciation and speak of potential aggressive measures to protect the Yen. Other currencies meanwhile recovered after a renewed appetite for risk with earning reports satisfying investors.

At the time of writing, the Bank of England reported an 8-1 vote to maintain interest rates the same. This boosted the Pound a bit. There could be some serious developments when it comes to the conflict with Iran as disagreement seems unbreakable and a return to military operations has been suggested. It feels like a mixed bag of news with markets looking at tech with hope, but worried about oil and energy. Data-wise, we have Personal Consumption Expenditures out at 8:30AM along with the first reading of Q1 Gross Domestic Product. We shall see if numbers change the tide.

What to Watch This Week…

The complete Economic Calendar can be found here.

JPY ⇑

The Japanese Yen climbed overnight by over 2.0% and reached its strongest levels over the Buck since April 15th following the above-mentioned rhetoric from Japanese finance officials. Japan’s top currency official Atsuhi Mimura and Minister of Finance Satsuki Katayama both echoed the same sentiment while explaining that the timing may be appropriate for “taking bold steps” to counter the Yen’s dramatic depreciation. JPY’s value has deteriorated particularly because of the armed conflict’s damage to smooth trading across the Pacific Rim, falling by 5.4% since mid-February. Japanese decisionmakers are likely to use a combination of FX operations along with asking for assistance from banking institutions to conduct oil swaps to alleviate turmoil in that market.

GBP ⇑

The Pound is rising after a meeting that showed the Bank of England is not looking to be stimulus-driven in the face of mounting inflationary pressures. The 8-1 vote’s one dissenter was Chief Economist Huw Pill who wanted to raise interest rates to 4.0%. BOE Governor Andrew Bailey explained in statements to the media questions that he foresees upward swings for food prices between now and Christmas time while also acknowledging that experts are coping with a high level of uncertainty. Simultaneously, the European Central Bank also voted on monetary policy and remained mostly focused on inflation as well.