Here is what you need to know on Tuesday, March 19:
The volatility surrounding the Japanese Yen and the Australian Dollar heightened during the Asian trading hours on Tuesday as investors assessed the monetary policy announcements from the Bank of Japan (BoJ) and the Reserve Bank of Australia (RBA). Later in the day, ZEW Survey from Germany and Consumer Price Index (CPI) data from Canada will be watched closely by market participants. The US economic docket will feature Building Permits and Housing Starts figures for February.
The BoJ announced that it lift the interest rate by 10 basis points (bps) from -0.1% to 0% and abandoned its yield curve control (YCC) strategy. Both of these decisions came in line with the market expectation. In its policy statement, the BoJ further noted that it will apply a 0.1% interest to all excess reserves parked with the JPY and said that it will use the short-term interest rates as its primary policy tool. USD/JPY rose sharply with the immediate reaction and was last seen rising nearly 1% on the day above 150.00.
Japanese Yen adds to post-BoJ losses, eyes YTD low.
In the post-meeting press conference, BoJ Governor Kazuo Ueda said that they will continue buying broadly the same amount of Japanese government bonds as before and added that they will consider options for easing broadly, including the ones used in the past if needed.
Ueda Speech: BoJ Governor speaks on interest rate outlook after historic hike.
Japanese Yen price today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the US Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.06% | 0.14% | 0.23% | 0.61% | 0.81% | 0.54% | 0.20% | |
| EUR | -0.07% | 0.09% | 0.15% | 0.55% | 0.76% | 0.49% | 0.15% | |
| GBP | -0.17% | -0.11% | 0.06% | 0.46% | 0.64% | 0.36% | 0.04% | |
| CAD | -0.23% | -0.17% | -0.08% | 0.38% | 0.59% | 0.31% | -0.02% | |
| AUD | -0.62% | -0.55% | -0.48% | -0.39% | 0.22% | -0.07% | -0.41% | |
| JPY | -0.84% | -0.75% | -0.70% | -0.62% | -0.20% | -0.27% | -0.61% | |
| NZD | -0.57% | -0.51% | -0.44% | -0.34% | 0.04% | 0.26% | -0.37% | |
| CHF | -0.23% | -0.16% | -0.09% | 0.01% | 0.39% | 0.59% | 0.31% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The RBA left the policy rate unchanged at 4.35% after the March policy meeting, as widely anticipated. In the policy statement, the RBA noted that higher interest rates are working to establish a more sustainable balance between aggregate demand and supply in the economy. “While there are encouraging signs that inflation is moderating, the economic outlook remains uncertain,” the RBA added.
Bullock Speech: RBA Governor sheds light on interest rate path after standing pat.
RBA Governor Michele Bullock said that they need to be much more confident on inflation coming down to consider a rate cut. AUD/USD came under bearish pressure following the RBA event was last trading slightly above 0.6500, losing more than 0.5% on the day.
Australian Dollar depreciates amid a higher ASX 200, RBA’s Bullock remains cautious.
After closing in positive territory for the fourth consecutive day on Monday, the US Dollar Index continues to stretch higher toward 104.00 in the early European session on Tuesday. Meanwhile, the benchmark 10-year US Treasury bond yield holds steady above 4.3% and US stock index futures trade marginally lower.
EUR/USD registered small losses on Monday and edged slightly lower early Tuesday. The pair holds above 1.0850 ahead of economic sentiment data.
GBP/USD stays on the back foot and closes in on 1.2800 in the early European session on Tuesday. The UK’s Office for National Statistics will release Consumer Price Index data on Wednesday.
Gold failed to gather directional momentum and closed the first day of the week virtually unchanged. The resilience of US Treasury bond yields make it difficult for XAU/USD to gain traction, which was last seen fluctuating in a narrow channel below $2,160.
Gold price seems vulnerable near one-week low amid hawkish Fed expectations.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly…
Read More: BoJ ends negative interest rates, RBA stands pat on policy