April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
Japanese yen drifts away from two-week maximum
On Friday, the Japanese yen drifted away from a two-week maximum versus the evergreen buck after North Korea told that it was still open for negotiations with the United States.
Although safe assets such as the Japanese yen and the Swiss franc rallied on Thursday in response to rising political tension after US President Trump told that his meeting with North Korean leader Kim Jong-no, initially scheduled for June 12, might not take place.
The US leader accused North Korea of canceling the negotiations and told about Pyongyang's open hostility. He also warned that the US military was ready to respond in case of any reckless actions by North Korea.
However, after North Korea stated that it was open for talks during the early Asian trading session, the risk of worsening sentiment dived a bit.
The Japanese yen slumped at the beginning of Asia trade after peaceful comments by North Korea's Deputy Foreign Minister Kim Ki Gwan.
Also, the weakening of the Japanese yen, to some extent, was caused by weaker than anticipated inflation data in the Tokyo region.
As the Japanese government informed, inflation in the Tokyo region, excluding the price of fresh food, also known as basic inflation, tacked on by 0.5% in May, compared with 0.6% per annum in April.
Now the figure is at the lowest value since September last year, questioning the probability that inflation will ever be able to hit the Bank's 2% annual objective.
Excluding prices for fresh food and energy, inflation in the capital went up by only 0.2% during the year, again below the 0.3% level demonstrated a month earlier.
Besides this, initial inflation, including all positions, tacked on by 0.4% compared to the previous year, which is below the 0.5% reading published in April.
The first days of May suggest the month will be risk-off for the GBP/USD. Here is why.
UK Prime Minister was placed in the intensive care. As a result, the British pound plummeted dramatically today.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.