AUD/USD is consolidating its recent losses above the mid-0.6300s during the early Asian session on Tuesday. Traders prefer to wait on the sidelines ahead of the critical Reserve Bank of Australia (RBA) interest rate decision due to be announced at 3:30 GMT.
EUR/USD refreshes YTD low on Tuesday and is pressured by a combination of factors. Bets that further ECB rate hikes may be off the table continue to undermine the Euro. The Fed’s hawkish outlook pushes the USD to an 11-month top and contributes to the fall.
Gold continues losing ground for the seventh straight day and drops to a fresh multi-month trough. Hawkish Fed expectations, elevated US bond yields and bullish USD continue to weigh on the metal. A softer risk tone fails to lend support, though oversold conditions could help limit any further losses.
Bitcoin price is still not in the clear, according to analyst and trader Rekt Capital, who explores the price action on a macro perspective. It comes after the big crypto leaped almost 5%, testing the $28,600 levels before a retraction.
The Reserve Bank of Australia (RBA) is on track to keep its key interest rate unchanged for the fourth straight time on Tuesday, in a meeting that will be the first one for Michele Bullock as the new central bank Governor.
The GBP/JPY pair tells the trader how many Japanese Yen (the quote currency) are needed to purchase one British Pound (the base currency). It is known to be a “carry currency cross”, that is a cross which is a vehicle for carry trading (one of today's most popular trading strategies). A carry trade happens when a person sells or borrows an asset with a low-interest rate in order to purchase another asset with a higher interest rate, looking to profit from the underlying interest rate difference. This strategy is heavily used in the foreign exchange market (forex).
HISTORIC HIGHS AND LOWS FOR GBP/JPY
All-time records: Max: 1014.000 on 01/01/1963 - Min: 116.853 on 19/09/2011
Last 5 years: Max: 195.843 on 18/06/2015 - Min: 124.78 on 26/09/2016
Bonds: Gilt (debt securities issued by the Bank of England), GJGB10 (Japan Generic Govt 10Y Yield) and T-Note (Treasury Note, a marketable U.S. government debt security).
Indices: FTSE 100 (share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization), Nikkei 225 (stock market index for the Tokyo Stock Exchange), Dow Jones (DJIA, Dow Jones Industrial Average, an index that shows how 30 large publicly owned companies based in the United States have traded during a standard trading session in the stock market).
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE GBP/JPY
The organizations and people that affect the most the moves of the GBP/JPY pair are:
Bank of England (BoE), known to be one of the most effective central banks in the world. It acts as the government's bank and the lender of last resort. It issues currency and, most importantly, it oversees monetary policy (including interest rates). Andrew Bailey became the new Governor of the Bank of England on March 16th, 2020. Her Majesty the Queen has approved the appointment. He is widely and deeply respected for his leadership managing the financial crisis, developing the new regulatory frameworks, and supporting financial innovation to better serve UK households and businesses.
Bank of Japan (BoJ) that issues statements and decides on the interest rates of the country. Its Governor is currently Kazuo Ueda. The BoJ has been applying very low interest rates for many years and even introduced a negative interest rate in January 2016, in an attempt lift consumer prices, which have been sliding for most of the past 20 years. Falling consumer prices is a concern for the country since they hurt corporate revenues and tend to stop spendings. The Japanese Consumer Price Index (CPI) is a key indicator closely monitored by traders of all JPY-related currency crosses.
UK Government and its Prime Minister, Rishi Sunak who took office in October 2022, a day after becoming leader of the Conservative Party.
Japanese Government and its Prime Minister Fumio Kishida, who replaced Yoshihide Suga in October 2021.
UK GDP (Gross Domestic Product), the total market value of all final goods and services produced in a country. It is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the GBP, while a low reading is negative.