Analysts at Standard Chartered told clients that the FOMC does not seem to have an operational consensus on how to use the balance sheet, having set aside yield curve control as a near-term policy option. Thus, it may disappoint investors. The data showed that net euro longs inched higher. Nevertheless, it remained off record highs touched a week ago.
There was a Thursday’s European Central Bank meeting before easing back. It was because policymakers talked it down the next day. Thus, the euro had spiked to a one-week high above $1.191. On Monday, it was up around $1.186.
Meanwhile, the yen rose 0.13% to around 105.9 yen to the dollar. It was a five-day high. On Thursday, the Bank of Japan’s meeting is not forecasted to yield any policy changes. Nevertheless, it might be quizzed on whether it can follow the Federal Reserve’s inflation stance.
Euro
Euro is on a good run. Thus, the euro inched higher.
Yoshihide Suga is Chief Cabinet Secretary. Succeeding Shinzo Abe, there is a good chance that he will become head of the ruling party of Japan on Monday and prime minister on Wednesday. Radical changes are considered unlikely because Suga has vowed to continue Abe’s policies.
Minori Uchida works at MUFG Bank. He is a chief FX strategist there. Uchida said that focus is on the line-up of his cabinet. Moreover, the focus is on whether Suga will call a snap election. Suga says that he will advance and continue Abenomics. Nevertheless, it is questionable how advancement he can make.
All in all, Suga is set to succeed Abe. So, the yen’s focus is on politics. The Federal Reserve will announce on Wednesday. Thus, the United States dollar is under pressure ahead of the announcement.
There is a wave of M&A deals. Thus, it lifted the mood on global equity markets. Therefore, investors are looking ahead to an event-packed week. It includes the appointment of a new Japanese minister and a Federal Reserve meeting.
